Creating contracts between your organization and clients, suppliers and partners is a big part of running your operation. Although making these agreements is a standard process, it is essential that you outline the terms property to prevent disputes and litigation.
In 2018, the Small Business Administration reported that there were approximately 30.2 small businesses in the U.S. If you run one of these small businesses, knowing how to create solid contracts can protect the ongoing success of your organization.
1. Put agreements into writing
Word of mouth can help you accomplish tasks quickly, but if you want to make a formal agreement, always put it into writing. Oral agreements are difficult to enforce and may not hold up in a court of law in the event of business litigation.
2. Include understandable language
Ensure both parties included in the contract know what to expect by including plain, direct language. Using complicated terms makes it easier for the other party to claim that they did not fully understand their role in the contract.
3. Outline the details
Use specific language that outlines the responsibilities for each party in the country. Outline the contract using different paragraphs that house varying aspects of the agreement in an organized way.
4. Incorporate terms for cancellation
Most business contracts do not last forever and are not meant to endure on a permanent basis before additional review. Include language on how you or the other party can terminate the contract, or language that details when the contract expires.