A well-written contract can offer you and your business important protections and help prevent serious issues from bubbling to the surface when you work with another party. Unfortunately, a contract that is not properly constructed could cost you large sums of money and eat away at your valuable time.
So to prevent problems down the road, you need to understand the possible mistakes that you could make when crafting a contract. And the following are three of the most common contract pitfalls that cause business owners grief:
- Including non-compete or non-disclosure clauses that cannot be enforced. These sorts of clauses can protect your company in a number of ways, but there are legal limitations to the conditions to which an employee can be bound.
- Failing to firmly establish intellectual property rights. If you are investing money in developing inventions and ideas, you should clearly delineate whether you plan to file for patents for your employees’ creations. If you don’t, you risk losing the rights to an article that may give you an advantage in the marketplace.
- Not outlining the manner in which disputes should be resolved. Contract dispute resolution comes in three basic forms; mediation, arbitration, and litigation. If you prefer arbitration or mediation, you need a clause that states this as well as a requirement that you have the approval of the moderator.
You have a lot on your plate as a business owner. The last thing you need is to have to put your energies into resolving a contract dispute. Nor should you be expected to be a contract expert. But you can get the help you need crafting an effective contract by soliciting the services of a knowledgeable business law attorney. An attorney can work with you to develop a detailed contract that is both clear in its wording and enforceable if breached.
