Businesses have numerous day-to-day contracts that help guide their operations and the relationships they have with suppliers, clients and even employees. The language within a contract dictates what obligations each party has.
Including the right terms in your business contracts will make a big difference in how functional and enforceable those contracts are for your company. What kinds of inclusions will optimize the benefit of your business contracts for the company?
Clear language about your agreement
You can set a specific price for certain supplies or an expectation for a recently-hired employee in your contracts. Reaching an agreement verbally is not problematic, but relying on your memory of a conversation could be. Putting everything in writing allows you and the other party to clarify what different terms actually mean for your company and will make it easier for you to enforce the contract if there is a breach of the contract later.
Rules about communication or disagreements
You may want to include requirements that the other party communicate within a certain time frame if they want to change the contract or end it. That way, you have time to hire a replacement professional to perform the job of a worker leaving for a different position or locate another supplier so that you don’t have to idle your production line due to a lack of resources.
If there is a conflict between you and the other party, having clauses in your contract about dispute resolution — like a requirement to meet directly and discuss the matter before going to court or to try alternative dispute resolution services — could help you smooth over disagreements and reach a more satisfying resolution.
Clauses that protect your company
The kind of contract you intend to sign will determine the best way to integrate protective clauses. In an employment contract, restrictive covenants can limit the risk that an employee will leave your company and take what they learned there to compete against the business.
Imposing a financial penalty on a client who cancels a service agreement prior to the end of the contract can be a way to minimize financial and scheduling disruptions. Even commercial leases can include clauses that protect you as a tenant.
Businesses often benefit from having unique contracts drafted for different situations and from fine-tuning their contracts before signing them. Identifying what you need to include in your day-to-day business contracts can help control costs and make daily operations more manageable.