Contracts are some of the most valuable tools available to a California business. Legal agreements allow two or more parties to enter into a business relationship confident of their rights and responsibilities. When entering into any type of business relationship, it is critical to lay a strong foundation by having a strong and thoughtful business contract in place. This can reduce conflict and protect the interests of all parties involved.
Strong contracts sometimes begin with a negotiation between the two parties to reach terms that are satisfactory to all involved. After an agreement on terms, it is then essential to ensure the formal agreement adheres to the terms reached by the parties and contains all necessary terms. Solid agreements not only protect the interests of both parties, but they also reduce the chance of potential conflict and legal disputes.
Negotiate from a position of strength
Contract negotiations are often necessary in order for two parties to reach a reasonable agreement on the terms of their business relationship. During negotiations, the following tactics be helpful:
- Go into discussions already knowing what you want from the relationship.
- Do your research, and know important laws, facts and figures that support your case.
- Have clear objectives, but be willing to listen to the other side.
Maintain a position of strength during negotiations by preparing well for discussions and knowing where your limits are before you begin the conversation.
Create strong and enforceable contracts
A good business contract should be enforceable, which means it will withstand the scrutiny of the court in the event of a dispute or breach of contract. You may consider the following when drafting a business contract:
- Terms should be specific and clear, centered around agreed upon terms.
- Include definitions for terms that may be complex or difficult to understand.
- Ensure that all terms and provisions are accurate, appropriate and legal.
When worded correctly and properly drafted, contracts can be useful in virtually every type of business relationship. Before you agree to the terms of a contract, enter negotiations or seek a resolution to any type of contract dispute, you may benefit from an understanding of how to protect your immediate and long-term interests. An effective agreement provides protection and confidence for all parties involved.