1st stop on our Shielding Your Business tour, Contracts (pt.1)!
Understanding a Contract
A contract is a legally binding agreement between two or more parties. There are many different legally binding contracts but nothing beats a clear well drafted written and signed document.
To make a contract, a contract it is going to require the following things:
- Terms & Conditions - an understanding between the two parties defining what it is they are agreeing upon.
- Benefits - something of value exchanged, to be considered by each party. Can be monies, products, services or pact.
- Competence - the representatives from each party need to be of legal age and of full mental capacity (Sorry but oral contracts during happy hour will not hold up in court)
- Agreement - Although oral contracts are legally binding you should protect your self and your business through the traditional "John Hancock" on paper.
When all aspects are in place, your contract can not be disputed. A good contract prevents problems and clears misunderstandings for the SBO. When a poorly drafted contract is in place, it can cause the SBO hassles with customers or companies, increased expenses and possibly litigation.