The do's and don'ts of entering into a contractual agreement

Contracts are legally binding agreements between two or more parties that are enforceable by the law. Some business contracts might be simple enough such as a purchase order or a verbal agreement while others may be more complicated, involving much higher stakes. Entering into a contractual agreement with another party is serious business, and you must never rush yourself into signing a business contract no matter how trustworthy the other party may seem.

When entering into a contract, your foremost concern should be to secure your own business interests first and then deal with the rest. The two most important things to keep in mind when entering or writing a contract is to make sure that all possible outcomes are addressed, preferably along with contingency plans and that the terms of the contract are clearly written leaving little or no room for ambiguity. Most disputes often arise over unclear terms.

The contract should be written using simple words and in short sentences, small paragraphs which are numbered for ease of reference, all the while avoiding repetition. Both the parties should be identified in the first paragraph making sure that the names are properly spelled and addresses mentioned are correct. Define all technical terms clearly to reduce doubt. The first paragraph should also mention the date for easy reference.

Having your business law attorney view every contract while drafting or before you sign it will help remove and clear any faults in the written agreement before it becomes binding. You should also ask your attorney any question regarding the term s that you have in mind.