Signing a contract can be an intimidating, but they are an integral part of business. We understand how to protect both parties in signing a contract and what mistakes should be avoided. This post will focus primarily on the contractor/drafter of the contract, due to the fact that this is a broad topic.
For some, the legal jargon used in drafting a contract can make your head spin. We have heard many horror stories about parties in a contract that later hurt their business because the other party hired an attorney who found a loophole and exploited it. Many people have had these feelings of anxiety both before, or after signing a contract, which is what prompted us to write the post. So here are four tips to help you keep yourself protected before signing a contract.
- Date the contract. Sounds obvious, but it is SO important to have your contracts dated to protect the statute of limitations and to put the agreement into a chronological perspective. Many people forget to date their signatures and it has the potential to come back and be a real problem.
- Make sure both parties sign the agreement. Another obvious fact, but one that often goes unrecognized. The contract might still be enforceable without both signatures from each party, but nonetheless, having both will resolve any dispute much more efficiently. Why spend time arguing over this simple point, when it can be done correctly at the onset? This is more applicable for a company or business man who is providing services to a client or for other business, but it is still important to note. If your client fails to sign the contract, you needlessly increase the difficulty in recouping any losses in a dispute.
- Initial last minute changes to the contract. If a change is made at the last second to the contract, make sure both parties initial it. Obviously, it is always best to adjust the language and reprint the contract. However, if time doesn’t allow for that and you must resort to writing it on the contract itself, make sure both parties initial the change.
- Make sure the other party has the authority to sign. It is always important to make sure that the person signing the contract is has the authority to sign it in the first place. It is surprising how many people get a signature from the wrong person and it later comes back to be an issue. Always, double check that the person signing the contract is the correct person in charge.
- Make sure the essential terms are present. A contract is only enforceable if al the terms are present. To put is simply, it must have a three essential terms: A) The names of the Parties; B) The subject matter of the contract; C) The consideration for the contract. If any of these are missing, the contract will fail.
These are just 5 major things that a drafter can do on their own. We highly recommended that you seek a legal professional to review your contracts to make sure things are done properly. The Sodhi Law Group is well versed in contract law and we would be more than happy to assist you in these matters. It is always better to have the right person find the mistakes in a contract than the wrong person. If you found this article helpful, or would like to inquire about how you can use our services, call us at (209) 900-8200 or email us at firstname.lastname@example.org.