Maryland business owners know the importance of a good business contract. A well-drafted contract can protect your business and help you avoid future contract disputes.
Define major terms
One major reason contract disputes arise is because parties do not agree on what the terms mean. All contracts should define major terms and both parties should understand the definition of the terms.
Terms must also be complete and tailored to your business. Standard contract terms can have different meanings depending on the business and industry.
A list of terms and their definitions is usually included before the contract language begins. That way, when you are reading through the contract, you understand the terms as you read them.
Ask questions
Negotiating is part of the contract process. During negotiation, ask questions if you do not understand something.
Never assume you know what certain terms or language mean. You could find yourself accused of breaching the contract terms because of a misunderstanding.
Additionally, asking questions does not make you appear weak or difficult. It is common for two capable parties to have a different understanding of what terms mean.
Asking questions and getting on the same page can save you the time, stress and money of dealing with a contract dispute down the road.
Review and seek advice
Once you believe you have a complete contract, review the terms carefully to see if anything is missing. While most contracts have similar language, some language is tailored to your specific business.
Review the contract more than once. Take breaks in between reviews to clear your head. Have someone else review the contract to ensure you have not missed anything and provide any feedback.
Pay special attention to boilerplate language, which is typical language included in many contracts. Contract language can be removed or modified even if it is boilerplate, so do not be afraid to request this if you feel it is not in the best interest of your business.