If you own a business in Michigan, then you have to be prepared for the countless relationships you will form with other people or businesses. You’ll need to draft contracts for everything from leases and vendor agreements to employment contracts and NDAs. If you’re not sure how to set up your first business contract, here are four things you should keep in mind.
You should ensure the agreement is in writing
This will help ensure that both parties are clear on the terms of the agreement and can avoid any misunderstandings down the road. If there are any oral agreements made, be sure to have them confirmed in writing as well.
Make sure both parties understand the terms of the agreement
Each party should know their respective rights and obligations under the contract. If any terms are unclear, be sure to have them clarified before signing the agreement. Both parties should also agree to any changes made to the contract in writing. Vagueness can often lead to conflict or disputes later on.
Stipulate all your responsibilities and rights clearly
Be sure to list out everything that’s expected of each party, as well as what they’re entitled to. This will help avoid any ambiguity and will make it easier to enforce the contract if necessary. Rights and responsibilities should get allocated fairly and in a way that makes sense for the agreement. For example, if you are hiring someone to provide a service, they should be responsible for ensuring the quality of their work.
Use simple, easy-to-understand language
Contracts should always be written in plain English so that all parties can understand it. Any legal jargon should be avoided as much as possible. If any terms need to get defined, make sure to do so in a way that is clear and concise.
If you’re setting up your first business contract, following these four tips will help you get started on the right foot. Contracts are an important part of any business relationship, so it’s important to take the time to draft them carefully.