The majority of people don't like the process of creating or negotiating contracts, but for many professions it's a necessity. That's why these 5 tips for helping avoid contract disputes are so important.
Don't fall into the trap of trying to get through the process as quickly as possible, forgetting that once you sign that contract, you're legally bound to its terms. Take the time to fully read, understand, and negotiate the terms. Doing so early, may save you time and money in the long run.
Take the 5 tips below to avoid contract disputes. They may help reduce risk, avoid costly court appearances, and save professional relationships.
- Identify all the parties involved in the contract. Is it clear in the contract who the party is and are they clearly defined throughout the entire contract? Seems obvious, but sometimes it's tricky if large companies or real estate is involved.
- Make sure the contract clearly identifies the responsibilities of each party. What services are offered? Go into as much detail as you when defining the scope of the services. What are the services? Who provides the services? How qualified are the parties performing the services? How much are the services? What tests, if any, should be performed? Should a report be drawn up? Who is in charge of ensuring that the services are completed?
- Do you have a project schedule outlined in the contract? Do you have contingencies in place if something occurs that throws the schedule off? For example, if working on a custom boat for a customer and the customer asks for a change in the boat design after the contract has been signed and the change would push back the boat's estimated date of completion, does the contract account for a request of this type? Do you have a procedure for handling changes?
- Are you covered? Does your contract limit liability? Does it contain warranties? Does the contract comply with insurance coverage?
- Has your contract been reviewed by an experienced and knowledgeable attorney? Before you sign anything, make sure an attorney has reviewed it.
If you are ever unsure about any part of a contract you can always ask your attorney for clarification prior to signing. Following this tips will not only help you avoid contract disputes, but it may save you time, money, and stress in the long run.