Transaction contracts are an important protection for modern businesses. What you include in the contract will determine how effective it is at upholding your agreement.
You want proof of what you agreed to and of any obligations that the other party has to you. However, a contract is only as strong as the terms that you include in it. Simply using fill-in-the-blank documents as a basis for your contract could leave you at a disadvantage.
The first time that you have a major default or breach of contract scenario, you may realize that you need to address these issues in your contract. You can add clauses to all of your future contracts that will protect you from issues.
Set rules for conflict resolution
Contract disagreements can damage your working relationship with the other party and cost your company thousands in court fees, even if you eventually resolve the dispute. The easiest way to address unpredictable future contract issues is to include a clause about resolving disputes.
Some companies will include arbitration agreements or mediation clauses in their contracts. Then, if an issue arises, both parties will have to go through alternate dispute resolution efforts before either party pursues the issue in civil court.
Although some people are averse to mandatory, binding arbitration clauses, your suggestion of conflict resolution systems doesn’t have to detract from their protection under the contract. Giving the option to choose between mediation and arbitration and the option of rejecting the proposed settlement are both ways to convince the other party to agree to out-of-court resolution attempts before litigation.
Adding the right terms to your business contracts can help you protect your interests and your bottom line.
