Signing a contract on behalf of your business means entering into a legally binding relationship. Once you sign it, you’re locked in, so if the terms are less than ideal, it could ultimately threaten your bottom line. Fortunately, you can protect your company and financial security by following these steps that business law attorneys everywhere share with their clients. 

3 Steps to Take Before Signing a Business Contract 

1. Review It Line by Line

Although everyone should always read the fine print before signing a contract, many people skip this step. If you make this mistake, you could end up agreeing to unfavorable terms. When reviewing the contract line by line, refer to your notes, past correspondence, or any meeting minutes regarding the transaction to ensure the conditions are exactly as they were discussed. 

2. Note the Total Price

Is the pricing structure transparent, or are there ambiguities? If the price is clear, is it fair, and does it reflect the original agreement? Also, review the payment plan closely, including the potential interest and fees for late or missed payments. Do you understand the agreement, and are its terms in the best interest of your business?

3. Establish an Exit Strategy

Since business law attorneys know contractual agreements are violated all the time, they advise clients to establish termination terms before signing a contract. If the other party violates the agreement, is there a viable exit strategy? On the other hand, if you fail to fulfill your obligations, do you understand what the penalties are? Finally, are the consequences proportionate for both sides?

If you need legal counsel to navigate complicated business transactions, turn to Donald L. Spafford, Jr., Attorney at Law in Honolulu, HI. This seasoned lawyer has practiced law for more than three decades. In addition to commercial litigation, his areas of expertise include bankruptcy, debtors and creditors rights, and contract law. To schedule a free consultation in which to discuss your situation with an experienced attorney, fill out the form on his website or call (808) 532-6300.