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Several critical clauses to include in a contract

On Behalf of | Aug 10, 2020 | Firm News |

Most entrepreneurs savor the moment that they are finally independent of any company, manager or boss. They revel in the fact that they are in charge and can run their business the way they want to. However, that moment may be dashed when you have to draft contracts.

As an entrepreneur, you may be tempted to implement a “DIY” solution, but contracts are notoriously complex – mostly to protect employers from disgruntled employees. It’s in your best interest to work with an attorney to draft the most concrete contract necessary.

Crucial contract clauses

It’s not enough to draft a contract though. Most business owners need to include specific aspects and details to protect themselves and others who collaborate with them. Four clauses that every business contract needs are:

  • The Parties – One of the foundations of any contract is who is legally bonded to that contract. It needs different approaches if you are developing a contract for individual employees or large corporate partners, but every contract should lay out the parties and the personal responsibilities of each.
  • Termination – It’s important to consider how to end a professional relationship when it begins, especially if you want to have a smooth transition. The clause needs to discuss how to terminate the contract and when it’s appropriate to end the terms. Do not leave this clause vague, or it may lead to potential issues.
  • Dispute Resolution – Along with termination, you need a clause that explains how you address potential disputes between you and whoever is bonded to the contract. It can show a high level of trust and security for both parties, plus it creates a game plan to address conflict before it even begins.
  • Confidentiality – A strong confidentiality clause is crucial for anyone who wants to protect trademarks, patents and other innovations in their company. You have to balance the clause in a way that’s not too narrow or too vague. You can also incorporate non-compete and non-solicitation clauses for employees if you want additional protection.

These are just a few of the necessary details to iron out in your contracts. You will need specific clauses depending on the circumstances and parties involved in your business, so make sure to consult with a professional to decide how to set up your contracts for the largest business benefit.