A contract is meant to protect all parties during a business transaction. Upheld by the courts, the document typically outlines the length of the agreement, services to be rendered, and compensation. Failing to include all key elements and not understanding the agreement could lead to disputes once the business transaction is complete. To prevent lost wages, frustration, and additional headaches, avoid the following business contract blunders.

3 Business Contract Mistakes People Often Make

1. Blindly Signing an Agreement

Even if a contract is lengthy, don’t just skim it and sign on the dotted line. In doing so, it’s easy to overlook important information regarding what obligations need to be upheld to prevent voiding the agreement. By reading the document thoroughly, you can ask for clarification if needed. If you have any objections, you might also want to make amendments.

2. Failing to Identify Parties Correctly

When creating a business contract, you run the risk of future discrepancies by not correctly identifying the parties involved. You must use the correct names and spellings for businesses, freelancers, or other independent contractors. Whether the parties are limited liability companies (LLC) or incorporated entities should also be included. When signing the contract, the LLC should be included to ensure professional and not personal liability if there are disputes later.

3. Not Including Provisions

You can’t foresee the future, which means there’s always a possibility a company could go under before the business transaction is complete. To avoid a company defaulting on their obligations, have provisions written into the contract. The section should outline steps to be taken in the event a party goes out of business and the agreement needs to be dissolved.

The legalese involved with creating and understanding a contract can be confusing, which is why Donald L. Spafford, Jr., Attorney at Law, in Honolulu, HI, is here to help. With over 30 years of experience, the attorney is well-versed in protecting Oahu companies during business transactions and making sure contracts contain all of the necessary information to hold up in court. He will also provide additional services to protect your bottom line and intellectual property. To schedule a free consultation, call (808) 532-6300, or visit the lawyer online to learn more about his credentials and areas of expertise.