Strong business agreements are extremely important, especially if you are in charge of creating them. There are many things that you can do to make it easier to draft an effective agreement, but one of the most important is to consult experienced commercial lawyers. Below are 9 top tips for creating a watertight business agreement:
- Talk to a professional
Again, the most important thing that you can do is talk to a professional commercial lawyer. They will make sure that you have all the legalities sorted out, which will protect you from problems in the future.
- Discuss the agreement with both parties
If you are in charge of drafting the business agreement, make sure that you talk to representatives from both (or all) parties involved. This will allow you to get an idea of their expectations, and will help you get started.
- Make sure both parties know where they stand
There is nothing more frustrating than trying to draft a business agreement between two parties who haven’t agreed on the terms of the agreement. Make sure that they know where they stand and that they are ready to make an agreement before starting.
- Make sure you cover the legalities
As a binding legal document, it is important to get it right when you are writing a business agreement. Always consult an experienced commercial lawyer if you are unsure about something.
- Make sure it is written clearly
Don’t use ambiguous phrases which could be interpreted in different ways by different people – the courts will tear the document apart in the case of a disagreement if you do.
- Make sure it is in writing!
Although this might seem obvious, many small business agreements are held by nothing more than an oral agreement. Obviously, this is hard to enforce, and could result in problems further down the track, since an oral agreement is not a legal one.
- Include details
Make sure that you cover every single little detail when you are drafting the agreement. Sure, the two parties might know where they stand, but the purpose of a business agreement is to serve as a legal document if problems arise.
- Agree on dispute resolution procedures
Business disputes are common. Agreeing on a way to resolve these is an extremely important part of writing a business contract, and could save you a lot of future pain.
- Agree on termination procedures
There will probably be some point in time when you want to terminate a business agreement. Agree on the terms of termination while writing the agreement – this will make things much easier in the long term.
Writing a business agreement doesn’t have to be hard. If you are unsure about your obligations, simply speak to an experienced commercial lawyer.