4 Contract Creation Tips to Avoid Disputes

Personal Branding

writing-1149962_640Entrepreneurs are no strangers to contracts. Whether it’s an employee agreement, a lease for office space or a purchasing agreement, contracts are frequently used to outline the expectations of business partnerships or relationships.

Ideally, the contract is in place so both parties understand what’s expected of them. Contracts ensure that everyone entering into the agreement is in full understanding of what they need to do or provide and what they will receive in return. Unfortunately, some contracts don’t accomplish this.

When a contract comes under dispute, it means that one side of the agreement had a different understanding of what the contract meant. Throughout a contract dispute, both parties end up arguing about what they believe the contract says — a process that can be exhausting and expensive.

Fortunately, contract disputes can be avoided. If you’re an entrepreneur, and constantly creating contracts for your business relationships and partnerships, here are a few tips you should follow.

  1. Use Clear Language

One of the biggest reasons a contract dispute may appear is because the language in the document is unclear or vague. When language does not specifically state what is expected out of each agreeing member, they’re able to instill their own ideas, perceptions or opinions into the contract. This can lead to disagreements in the future and the need for a contract dispute.

Inconsistencies in language may also cause issues. If the same language is not used throughout the entire contract, there may be contradictory or conflicting sections. This may cause confusion down the road and lead to disputes of the contract.

Using clear language throughout the entire document, which accurately describes what’s expected, is crucial for avoiding contract disputes. Language should also be simple and easy to understand. To ensure it’s not vague or ambiguous, have an attorney review the contract to see if any language should be changed or removed.

  1. Define Standards and Expectations

Contracts may also be disputed if the expectations or standards are not clearly defined in the document. If a contract does not include timelines, due dates, quality standards or expectations, it can be difficult to argue whether or not the project was completed properly.

In a contract, it’s not enough to say that you want something done. It’s important to clearly lay out the scope of each project, when the project should be completed and to what quality level the project must be done. The language of the contract should be as specific as possible, including dates, numbers and other measurable details whenever possible.

  1. Think About the Future

When entering into a partnership, it’s important to think about the future. Even if the contract is only valid for a short period of time, or you don’t see any problems arising down the road, you want your contract to be relevant through the entire duration of your relationship.

It’s important to note in the contract what will happen when the contract’s life runs out. If the contract will automatically renew, you’ll need to include that in the document. You will also want to consider including a way either party can break the contract if necessary.

Contracts may also need to consider more serious situations, such as what may happen if one party goes out of business. If the party will still be responsible for upholding their end of the contract, it’s essential to include this within the document.

  1. Get It Notarized

Once the contract has been written and agreed to, you will want to get it notarized. Notarizing the contract can help protect all individuals involved in the agreement, because it means the document is now legally enforceable. This gives the involved parties legal permission to take action if the contract is not met.

Notarizing a contract can also help avoid contract disputes in a few ways. First, knowing that legal action may stem from disobeying the contract will encourage both parties to thoroughly read the details of the document and request changes before it’s signed. A notarized contract can also hold both parties responsible if one tries to claim they did not agree to the document.

There are many ways to notarize a contract, including mobile notary services. With the ease of getting a contract notarized, there’s no reason not to take the extra step in protecting yourself and your company.

When creating a contract, spend some extra time thinking about potential problems or issues that may arise. While it may mean spending another day or two developing the right language, being proactive in contract creation can save you time and money in the future.

Identify confusion, misunderstandings and the needs of each party before the contract is signed to ensure everyone is protected and prepared.