Contracts are the Life Blood of Your Business
The Hartmann Law Firm LLC
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What is the fiber that undergirds a business's – every business's -- ability to survive, grow and prosper? Financial strength? Good employees? IT? Vision? Strategy? All are important.
But the truest foundation of all U.S. and global business, from the smallest company to the largest, is the knowledge that a contract is a contract, that the parties can enforce contracts against each other, and that if the parties will not voluntarily meet their commitments, an ultimate authority called a court will uphold the bargain.
- If you run a business, step back and consider which contracts are at the bedrock of you business. Here is just a short list.
- Real estate leases which allow you to operate in one or more locations;
- Equipment leases that allow you to have equipment to operate;
- Customer contracts that establish your relationship with the hundreds or thousands of people who buy your services;
- The asset or stock purchase agreement that allowed you to buy your business in the first place;
- Information technology contracts that allow your computer systems to run and be backed up;
- Employment contracts you may have with key staff;
- Shareholder or other equity agreements that exist between the owners of a company;
- Loan agreements you have with your bank to keep the business moving when cash is needed;
- Medical insurance contracts that provide benefits to employees; and
- Key consulting agreements that provide vital support to the core company business.
If contracts are that important to your business, how are you negotiating them – alone or with an expert in the field, whether a lawyer or some other expert? Do you at least make sure someone like a lawyer does a sanity check on the contract before you sign it? What have you done to be sure you understand your or the other party's obligations, to know what happens when things do not go smoothly, to anticipate change and to enforce rights? Are you relying on an oral commitment, when the contract says everything must be in writing?
Consider customer contracts. You use this form to enter into all contracts to sell your products or services. It may be used hundreds or thousands of times a month or year. The validity of your customer contracts is the life blood of your revenue stream. One error is not one error. It is automatically a hundred or a thousand errors. Are all the key terms in there – price, duration, termination, time for performance, warranties, limitations on recovery? Are statutory or regulatory requirements fulfilled?
Yes, it costs money to ask a lawyer or other trusted professional to review your contractual commitments – before they become commitments. But it is money well spent. A trusted advisor can ask questions you have not; raise issues you have not; expose ambiguities and hidden obligations; negotiate with or for you if you want to preserve a relationship; and apply common sense in emotional situations.
Your contracts are the foundation of your business. Safeguard them by making sure they are right from the start.
The Hartmann Law Firm LLC can assist in these compliance matters to insure your business and your assets are protected. Beyond this, we can help guide businesses through issues ahead of litigation or aggressively advocate in litigation and business disputes should the need arise.