New business relationships can be very exciting for business, but it’s important not to forget about the value of a clear, well-written contract. An attorney that specializes in business law and litigation can help you develop a full-proof contract that lays out the rights and obligations of all parties and ensures your rights and interests are protected. With a good contract, you can avoid a dispute down the road, which can result in trouble for business and costly lawsuits. Charles PT Phoenix Attorney shares three tips to help you avoid a contract dispute.
1. Identify Performance Standards
When defining the performance standards of the parties involved, it’s important to use language that has clear meaning. Too often, businesses make the mistake of using broad terms. It’s not enough to say someone must conform to industry standards or industry best practices. You must outline exactly what those are to ensure there are no discrepancies in the future.
2. Define Potential Misinterpretations
Without clear language, it can be easy for parties to misinterpret parts of the contract. Define any areas where misconceptions could occur. Make sure the expectations of all parties involved are clearly stated in the contract and are also understood before signing. This will help ensure everyone is on the same page, as well as prevent accidental breach of contract.
3. Include Provisions for Early Termination
Instances may arise when a party may no longer be able to fulfil their obligations as stated in the contract. Or, perhaps the services provided by the contract are no longer needed. Either way, instead of waiting for a breach of contract, including an escape clause can save you a lot of time, stress, and money. An early termination provision allows either party to exit the contract. In return, they must pay the other party either a percentage of the amount that would have been paid over the life of the contract or the estimated profit that they would have made had the contract been entirely fulfilled.