The mention of contracts elicits fear in the minds of many who are overwhelmed by the numerous hurdles involved in signing a legal document.
A contract is a formal agreement, either verbal or written that is enforceable by law. For the purposes of business, written contracts are the preferred method, and with them come a number of considerations to ensure that you are entering into a mutually agreeable arrangement.
There is a natural tendency to skip over details within a contract, particularly when the content is lengthy and filled with jargon. However, it is vital that you understand the terms so as not to land yourself in hot water in the event of a breach.
Here are some guidelines to follow prior to entering into a contractual agreement:
Read the document in its entirety
All parties to the agreement should be familiar with its contents. Ensure you are in agreeance with all clauses. If not, seek advice.
Take your time
Contracts involve important decisions and significant time should be spent reviewing the contract before signing. Do not be or feel pressured to sign before you are ready, and make sure you understand the consequences of non-compliance for both parties.
Enter into negotiations
Where a party does not agree with a clause within a contract, it is their right to negotiate. It is important that you propose changes that satisfy both parties in order for them to be considered.
Seek legal advice
Legal advice is readily available in order to help parties comprehend the specialised language that can be present in contracts. It is important that you remain aware of what it is you are signing at all times.
Sign the contract on the business’ behalf
Separate yourself from the business and sign as a representative. You should clearly state, both verbally and through writing that you are acting on the business’s behalf. This assists in the avoidance of personal liability.
For more helpful business advice, contact us at Leenane Templeton on 02 4926 2300