Running a business, big or small, means making deals. Whether you’re a mom-and-pop shop or aiming for nationwide expansion, every business relationship should be written down in a contract. A written contract isn’t just for the big corporations; it’s vital for everyone. It’s how you make sure everyone sticks to their agreement and protects both sides if things go wrong. This article will walk you through some key things to think about when creating contracts between businesses.
There are several aspects of the business relationship which must always be contractually considered. These may include ensuring returns on profit, and setting parameters for a physical product or service to be provided. Aside from those general parameters, one must also consider aspects that protect the integrity of the business itself such as Non-Disclosure, Release, and Non-Compete clauses to mention a few. We shall run through all these aspects, starting with ensuring payment.
Realizing a profit on returns is the main purpose a business is started, as such, it is one of the most important aspects to be regulated. The first thing one must consider when setting out the parameters for recovering payment from clients is the project which requires completion. This is where the contract must go into painful detail about what must be completed, when it must be delivered and when payment is due. These parameters may set out deadlines in terms of dates as well as phases of a project, e.g., when a beta version of a computer program is tested may be a phase deadline, and the following phase maybe when the computer program is operational for the consumer, etc.
The next aspect to be regulated by the contract is the transaction involving a physical product. This would require specific details such as the date of the order on which it must be delivered. Order dealing with a physical product that must be routinely delivered or where it is broken up into parts dependent on the nature of the product. The acceptance which will qualify the product as satisfactory, by whom such acceptance must be set forth, and what test the product must pass for the acceptance to be valid. Further one must consider the warranties for such a product. The list of requirements for a physical product that must be contractually mandated is extensive and this is just a brief overview.
Businesses also contract with various service providers who enable them to provide their services to their consumers. Such transaction services which must be contractually regulated include the exact dates of performance of such services or events which may prompt the need for such services. Further, the scope of work required and as well as payment terms must be established once the service provided has passed the standard of acceptance as set out by the contract.
Should you require assistance in the drafting of a contract between your business and another or any legal assistance in ensuring the progress of your company contact us and we will gladly assist.
Saeedah Salie
saeedah@bbplaw.attorney
Associate
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