July 23, 2020
A contract can be verbal, but typically it’s going to be written so there’s no game if he said she said. They are legally binding for both parties. These agreements are enforceable in court and when it comes to business, they can be made between owners, new employees, contractors, vendors, government bodies, financial institutions, and plenty of other people or organizations. Each contract is different and can be anywhere from just a page or two to hundreds.
Everyone knows the old adage “the Devil is in the details” and that’s exactly why businesses need a good business contract review attorney on their side for legal advice. While you’re going to be drafting the most contracts towards the start of your large or small business, new contracts will constantly keep coming up. As a savvy business owner, you probably are aware that you should avoid picking apart contracts all on your own. And that’s smart—generally you want to avoid signing legal contracts without first having your legal counsel review it.
Once the contract is signed, you can’t simply back out of it easily. Often, a breach of contract ends with very expensive litigation, suits, or flat fees, so it’s really important to know exactly what you’re signing on for. These “gotcha” clauses are exactly the type of thing you need a legally trained eye to pick up on.
As a business owner, you may be thinking how expensive it is to hire a business lawyers. It is true that legal work is generally pricey, but just think about how much more expensive a lawsuit could be down the road. They’re not something to mess around with, since they have bankrupted countless businesses. Besides, there are budget-friendly options and legal experts who charge based on package deals rather than with a standard hourly rate.
Contract lawyers from a law firm are specialists in just that: contracts. They draft them, review them, and offer you advice specific to your situation. Generally, they will also offer litigation as well, should anything go wrong and you have a dispute or breach of any contract you’ve signed onto.
If you’re still not convinced, here are some key reasons contract review attorneys will give you legal help for your business.
Tricky Wording
It’s called legalese for a reason—it may as well not be English! Words meant to trip you up at first glance are put there for that exact reason. Sometimes you read something and think it means something completely different. There’s a reason why a business attorney has gone to school for years! They know exactly the kinds of tricky words like “notwithstanding” and “hereunder” that are often put in contracts to make them hard to read.
Catching Loopholes
We mentioned the “gotcha” clauses above, which are designed to trick the unsuspecting eye, but loopholes are a bit different. Loopholes are defined as “an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded,” so they’re oftentimes things that are intentionally left out or worded strangely to add to confusion.
As a small business owner, you probably don’t have enough expertise and experience in law. Leave the legal issues to the experts. Lawyers have been trained and seen countless contracts over the years, so they know exactly the tricks other lawyers try to pull and can help protect you for your business needs. Everyone wants the contract to be in their favor, so when you’re handed a contract you need to be aware that the other party seeks to protect themselves. Not to imply that a partner or new vendor is necessarily malicious, rather they are simply ensuring things not work out that they are not left hanging.
Venue or Forum Selection Clauses
Although in the age of digital this is much less common, some parties may still try to slide a venue clause past you. This clause sets the physical location for any disputes to be resolved. While this may not seem harmful at the outset, it could obligate you to travel out of your way (perhaps with legal counsel as well) for a meeting. As you can see, the cost of this could add up really quickly, thereby disincentivizing you from even doing it. A good contract review attorney could avoid putting yourself in that position to begin with.
Better Negotiating Position
If it’s just you oppose a lawyer negotiating the terms of a new deal, you’re up against a pro and might not have the upper hand. When making important business deals you want a level playing field, if not the advantage, to get the best terms. You might need someone who knows the ins and outs of contracts and who speaks the language of legalese fluently.
Ensuring both parties are satisfied with the deal will make for a stronger partnership and create a long-lasting relationship of trust. Start out with your new deal on an even keel and ensure your business thrives as a result.
Protect Your Company and Employees
Poorly written contracts could put your company in a weak position and can put you and your team members in difficult situations. No one can tell the future, but having comprehensive contracts that cover a wide set of possibilities minimizes the risk for an unexpected curveball to derail your operation.
Expert lawyers who live and breathe contract law have seen everything under the sun and know what works best for your situation. Leverage their experience and skills to protect your business and everyone in it.
Money
When it comes down to it, hiring a lawyer will cost you. But not hiring one can really cost you down the road, big time! An attorney with experience in your industry will know what the customary contract terms are. An attorney can offer advice on typical contract terms or write a business contract that pushes the boundaries in your favor—potentially saving you thousands of dollars.
There is no crystal ball, but the longer you stay in business and the bigger you grow, the higher the chances of something going wrong. Even if your company might be small and you may not think small mistakes can cost you much now, eventually you’ll hopefully grow and expand. Some of your early contracts may still be in effect and come back to bite you. Make sure you’ve prepared from the start.
Project Confidence and Trust
Having everything done by the book, properly and with no funny business at the start establishes your business with a certain reputation—the good kind. Being a new business, you need to build confidence from the ground up and usually this starts with your first few key negotiations and contracts.
Having a lawyer consulting on your end gives you that extra layer of credibility and professionality to ensure your contractor, associates, and partnering organizations see you and your company as respectable. Later on, they will vouch for you. Word travels fast in business circles and a tarnished reputation is hard to live down.
Automatic Renewal
We’ve all signed up for a 7-day free trial and then forgotten to cancel it. Now imagine that’s a year-long binding business agreement—not just a $7.99 streaming service. Don’t make that mistake with your business and make sure you have a professional eye comb over any contracts you sign. Have an automatic renewal can be great for a vendor who wants to lock you in as a customer long-term, but not so great if you get a better deal next year or if you aren’t too happy with their service after a time.
Overall Peace of Mind
Running a business is hard enough as it is, why add extra worry to the matter? Don’t stress yourself out about every piece of paper to cross your desk. Contracts are hard and designed to be tricky. They’re made by the experts to be hard to understand intentionally. Don’t risk your business because your eyes glazed over on page 47 and missed a key phrase in one of the clauses. These kinds of things can come back to hurt you, so why chance it?
Summary
You are not an expert at contract interpretation or law, so contracts are probably not something you particularly enjoy reading through for hours and hours. You want to make sure you’re getting a fair deal and that you aren’t falling prey to some of the traps that are sometimes found in standard contracts. You definitely want to be reading all the contracts you sign, but make sure to have a contract attorney review it as well.
As we’ve mentioned before, being in breach of a contract is not great and can end up with very serious consequences. Depending on the wording, you may be tied up in court for years or even end up with a penalty so large it puts you out of business. When you’re getting into an agreement, make sure you know exactly what you’re signing on to. Not every clause is going to be 100% to your liking, but as long as you understand what you’re getting into you can generally avoid the headaches that come with contract surprises down the road.
When choosing a lawyer or legal team, while cost will certainly be an important factor, keep in mind their expertise. If you’re a budding tech company and the firm has experience with mostly insurance companies, probably better to keep looking. You want to have an experienced person or team on your side who are well-versed in your industry’s lingo and particularities in your locality.
