Well- Written Contracts Can Prevent Enormous Trouble and Significant Losses
Strong, well-constructed contracts are the bedrock of sound business dealings. Every business will have contracts with employees, vendors, those among executives, or other types. Contracts are used to define the parameters of acceptable conduct by the parties to the contract. Contracts can also spell out specific actions that the parties must take to resolve disputes, take on new partners, dissolve the business, or any other foreseeable development.
—Dan Fredenberg, Esq.
When it comes to contracts, it has been said that people either pay now or pay later. Pay smaller amounts at the outset to have a skilled professional construct effective contracts to govern every aspect of their business ventures or they can pay later to have lawyers fight in court.
Part of what one pays for in a pay now situation is for a skilled attorney to sit down and think of everything that could possibly go wrong in your new business venture. The attorney then writes a mutually agreeable document—a contract or partnership agreement—for you and your partners that mitigates or eliminates any harm that might result from an undesirable scenario becoming a reality.
The more care-free person can simply engage in business activities with another person or entity without taking the time to construct agreements to govern those activities. This often ends up being the pay-later client.
If the parties to a business venture take the time to cooperate in writing and signing agreements that will govern foreseeable outcomes of their business, they can save themselves enormous amounts of time, money, and energy in working out the disagreements covered by the contracts before they become real-world disagreements.
Business professionals generally engage in contracts when things are going well and they do so in order to prevent chaos should the business dealings turn bad. Most businesses will engage in at least one of three major types of contracts:
1. Contracts with employees.
2. Contracts with vendors.
3. Contracts among partners.