At some point, nearly every business owner will enter into agreements with customers, vendors, employees, independent contractors, landlords, or business partners. While many people are tempted to rely on verbal promises or generic forms they find online, doing so can often create unnecessary and expensive issues later on. Fortunately, a well-drafted contract can establish each party’s rights and responsibilities before a disagreement ever arises. That is why one of the smartest investments a business owner can make is having the proper contracts in place from the very beginning, drafted by skilled counsel.
What Are the Most Important Contracts for a Business?
The agreements your business needs will largely depend upon your industry, the services you provide, whether you have employees, and how your company operates on a day-to-day basis. Some of the most common business contracts include:
- Customer or client service agreements,
- Vendor and supplier contracts,
- Employment agreements,
- Independent contractor agreements,
- Partnership, shareholder, or operating agreements,
- Non-disclosure agreements,
- Non-compete or non-solicitation agreements where permitted by law,
- Commercial lease agreements,
- Purchase and sale agreements for business assets, and
- Terms and conditions that supplement invoices.
Why Should My Business Use Written Contracts?
Many business owners have long-standing relationships built on trust, and while trust is certainly important, a properly drafted written agreement is just as important. People can remember conversations differently months or years later, particularly when money is involved. Written contracts generally provide several important benefits, including the following:
- Clearly defining each party’s obligations, duties, and rights,
- Establishing payment terms and deadlines,
- Limiting misunderstandings regarding the scope of work,
- Identifying what happens if one party breaches the agreement,
- Protecting confidential business information, and
- Reducing the likelihood of expensive litigation.
When Should I Have a Business Attorney Review My Contracts?
Fortunately, you do not have to wait until a dispute develops before speaking with an attorney. In fact, it is often much easier and less expensive to prevent legal problems than it is to resolve them after they occur. You should strongly consider having a business attorney review your contracts if:
- You are starting a new business.
- You are hiring employees or independent contractors.
- You are entering into a partnership or bringing on investors.
- You are signing a commercial lease.
- You are purchasing or selling a business.
- You have been presented with a contract drafted by another party.
- Your existing contracts have not been updated in several years.
Ultimately, contracts serve as the foundation for many business relationships, and if you own a business or are preparing to launch one, one of the most important things you can do is partner with a seasoned Rochester business lawyer who can help ensure your contracts protect your rights and interests.
If you have questions or would like to speak with an experienced attorney, please contact Lacy Katzen LLP today.
