For a business to succeed, many different moving parts need to align properly. However, if the foundation of the business is strong, then success and growth will come more easily.
One of the best ways to start off with a strong foundation is through the creation of good contracts. But what exactly makes a contract good?
Why are good contracts needed?
Score discusses the steps a person can take to write a good contract for their business. First, in more generic terms, it is best to be as specific in a contract as possible. This prevents misunderstandings and it also lowers the possibility of loopholes occurring later down the line.
In specific, always define things by who, what, where, when and how. Who are the parties involved in the contract? Always specify.
Asking the important questions
What are the intents and agreements within the contract? Always cover things like deliverables, time frames, compensation, who holds responsibility for what tasks, and who owns proprietary information.
Where is the jurisdiction? Deciding this will allow a business to determine what set of laws their business will fall under if they end up needing to know about local legalities.
When will the contract last to? What is the term’s length, will a renewal arrangement get included, or does it auto-renew? And how will the business handle termination?
How will the company handle issues like breaches or liability? What constitutes a breach and who holds responsibility for what?
Contracts can ensure that no one gets too hurt in the event of a falling out, and can even prevent these issues from happening in the first place. The aforementioned tips can help build a strong one from the start.