So you’re eager to start your own business, but you’ve got one major hurdle.
The legal obligations of running a small business are always a challenge and small business contracts are a huge challenge for budding entrepreneurs.
Many such business contracts will cause issues because the entrepreneur isn’t familiar with business law. At times, you’ll unwittingly violate the rules of contract law!
This quick guide will show you some of the common mistakes that come with small business contracts.
Here’s what you need to know.
1. Non-Disclosure Agreements
If you want your contractors or employees to remain hushed about your creations then you want to include Non-Disclosure Agreements (NDA) in your business contracts.
For example, let’s say you run a publishing firm that hires ghostwriters to write your books.
You wouldn’t want these ghostwriters to reveal that they are the actual authors of your books. Including an NDA agreement in your business contracts ensures that they’re held liable if they do breach terms.
These are crucial for protecting your intellectual property. It’s also crucial if you create works for clients. Your clients want to ensure that their content won’t get leaked to the public or to any third party.
2. Concise and Simple Language
There’s no room for ambiguity in a business contract and you must ensure that the contract is as short as possible. Make sure the language is simple and can get explained in layman’s terms.
At no point, should the other party have to endlessly question some of the text in your business contracts.
As a result, you want to revise your contract several times before sending it to the other party. You want to make sure it’s as simple as possible to comprehend.
Often, you’ll want to share your business contracts with a disinterested party who doesn’t have a legal background. They’ll give you an unbiased opinion on whether the contract is simple to understand.
3. Doing It On Your Own
Perhaps the biggest mistake you can make is to draft a contract on your own. Even if you have a legal background, it’s always best to hire professionals to help you draft your business contracts.
A firm such as Welch Law Firm has extensive experience with helping entrepreneurs create a valid contract.
Attorneys and law firms can also help you understand the fundamentals of business law and contract law. This is the best way to protect your business and ensure that there are no issues as your company grows.
Prepare Your Small Business Contracts
Now you know the three common mistakes to avoid with creating small business contracts.
You want to always include an NDA and confidentiality agreements in your business contracts. This is crucial to hold the other party liable if they breach terms.
Make sure you also use simple and concise language. It should be understood by a layman without a legal background. As a final step, make sure you work with a great law firm to help you prepare a valid contract.
You can find more legal and business-related content on our blog.