Running a small business takes a lot of time and effort if you want the business to succeed. Those who plan ahead can avoid certain pitfalls, which can help your business run smoothly and more cost-effectively. One pitfall many small business owners face at some point is becoming involved in a contract dispute.
Contract disputes take time, effort and sometimes money to resolve. The more time you spend resolving business disputes, the less time you have to help your business succeed and expand.
Five steps to take
Your business can help avoid a future business contract dispute by taking the following steps:
- Make sure you are negotiating and drawing up a contract with someone who is authorized to act as a representative for their business.
- Ensure your business attorney and the other party’s attorney review the contract before signing it. An attorney can help clarify any vague language and make sure the contract protects your business interests.
- Make sure all budget costs for the project or service the contract covers are set. Your business needs to account for a project or service fully before signing a contract. You may even want to include some wiggle room in your budget as projects have a way of being more expensive than anticipated.
- Make sure the details of the contract are well-defined. Your business needs to include what exact services and products are involved in the contract, what the payment terms are, what the contract deadline is and what will happen if either party breaches the contract. The contract also should outline what each party’s risks and responsibilities are to execute the contract.
- Have a notary public notarize every contract your business enters. A contract will be easier to enforce if a notary public has endorsed it. You even may want to make sure your business accountant or your human resources representative is a notary public to ensure you can easily get business contracts notarized.
Taking these five steps to avoid a business contract dispute can prevent your business from facing a difficult business dispute. By being proactive and taking these steps, you can help avoid getting bogged down in working to resolve a contract dispute instead of helping your business grow.