Are business contracts complicated? Yes, almost all the time. This is why many successful business owners have attorneys dedicated to the task of writing and reading them. But it never hurts people who are subject to business contracts to understand the basic terms they include.
- What are the most common clauses that show up in business contracts?
A recent study found that the same four clauses come up in many types of contracts. They include indemnification, terms of business, limitations on liability or damage and the representation class of clauses.
- What does any of this mean?
Most of these clauses are related to what the parties should receive in the case of other parties not living up to their expectations. Indemnification is a term for compensation after a loss or other failure of the contract. Limitations often define the maximum amounts or types of indemnification. Representations or warranties are related to what parties to a contract are guaranteeing to each other.
- What about terms of business?
This often has more to do with the expectations that parties to a contract have for how they will work together or provide each other goods and services. This may include how long the arrangement will last and what is included in the relationship.
- Who can help with business contracts?
A lawyer can always help create a contract or interpret one if it’s time to go to court. Many disputes can be sorted out without a trip to a courtroom, such as through mediation or settlements out of court. Consider all these options before a dispute escalates.