One of the main reasons for creating contractual agreements with business partners is to establish responsibilities and obligations. Ideally, so long as both parties deliver on their promises, all will go well. An effective business contract is one that covers all contingencies in terms that are concise and understandable. But achieving this is not always as easy as it sounds. And unfortunately, problems with contracts are sometimes not discovered until well after the document has been signed.
The following are three areas of contract development that, if not properly handled, could be the basis for disputes:
- Verification of a party’s ability to sign the contract. It is all too easy to become contractually obligated to a person who is not whom they claim to be. And while the discovery of such fraudulent activity can nullify a contract, the perpetrators could still bilk you before you catch on. As such, you want to exercise due diligence in confirming the identity of those with whom you want to do business.
- Accounting for costs and budgets. Prior to starting any project, you need to negotiate responsibility for all the specific costs and finalize your budgets. You should never enter any agreement without these details thoroughly worked out.
- Proper notarization of the contract. Notarization ensures that your contract can be enforced in a court of law, providing the contract itself is legally valid. And signees cannot claim they did not sign the document should your case wind up in court.
A flawed contract can doom a project before it even begins. And you could suffer a severe economic loss simply because you did not take the steps necessary to craft an airtight agreement.
But the fact is, anyone could make critical errors while creating a contract. Therefore, if you are preparing to enter a contractual agreement, you may want to seek the assistance of an experienced business litigation attorney. An attorney can help create a contract that meets your needs and act on your behalf if the contract is not honored after being signed.