We see contracts in various stages. There are times we are asked to draft an agreement, revise an agreement, or review a contract already negotiated. Unfortunately, we also see contract disputes. Many disputes arise from a misunderstanding of the deal.
When we are called to work with a contract that is not yet signed, we typically start by asking the client, “What is the purpose of this agreement, what is your goal?” This allows us to ensure your purpose is met and we are providing advice to protect you, in the event something goes wrong. Here are a few pointers when thinking about a contract:
DO
- Be explicit about the goal of the contract
- Be willing to answer “what happens if something goes wrong?”
- Be OK with multiple drafts
- Be open to changing the original terms to accommodate new information
- Be aware of who the other party is, and who might have authority to make decisions for the business
DON’T
- Shy away from adding a lot of detail
- Leave anything to “an understanding”
- Assume the deal will close
- Leave dates/timelines ambiguous
As the above makes clear: Details Matter. When working with a small business on a contract we frequently hear “we agreed to X, it is not in the contract but we agreed to it.” If the detail is not in the contract, it is not part of the contract. Another common refrain is “we don’t need to worry about anything going wrong, they are good people.” Good people and businesses can miss deadlines or fall on hard times and not be able to complete the deal. This was very evident in 2020 when many businesses faced unprecedented struggles. Many contracts did not contemplate a Pandemic. This was highlighted in commercial real estate. Very profitable businesses were suddenly forced to close their doors, but rent was due, and contracts were strictly enforced in some instances.
We see many variants of contract issues and use that experience for the benefit of our clients. For instance, in 2021 we now discuss the possibility of a pandemic in a commercial lease, something that was not a pressing matter a few years ago. We can walk you through a contract and ask questions that will help flesh out details you may have not considered.
Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.