Today, I feel vindicated. I just came across Laura Bell’s post, “Business Law Basics,” which reminds me of my apartment after it’s cleaned: neat, fresh and pleasant. Her point, delivered gently, is that too many entrepreneurs do deals without having a written contract. It’s like bringing a knife to a gunfight: You may be prepared for trouble, but not well enough to avoid serious injury.
Bell outlines the elements of a contract (important, if you want to understand when the deal is actually “struck”) and why a cancellation clause is helpful.
Exit strategies (the “how-do-I-get-out-of-this-deal-if-it’s-really-not-working-for-me?” language) are a vital part of any business relationship; otherwise, you risk being stuck in a bad situation with no easy (or inexpensive) way out.
Want a quick an easy way to learn more? Check out my booklet guide, Term$ and Condition$, so you’ll know the highlights of what to put in your agreements.
This entry was posted on Thursday, April 17th, 2008 at 6:13 am and is filed under Contracts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.2 Responses to “Business Law Basics: Contract Essentials”
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April 25th, 2008 at 8:44 pm
I find this information to not only be true, but it will often be the “thorn” in the small business’ side when they figure out that their “deal” is not profitable and then on top of that they see no way out. My organization, Evolution Enterprises Inc., has been established to provide this exact type of information and support to small and large businesses alike. The contractual terms of any agreement bear heavily on the amount of control, profit, progress, and positive outcomes available within any business arrangement or”Deal”. Although my expertise has been mainly in the Federal sector, commercial business law is very similar and comes with very similar pitfalls if not executed correctly. Great point!
April 28th, 2008 at 1:11 pm
Nothing to worry about. This is a nature of small business to make quick decisions. Especially when a deal is between two small businesses. Business people trust each other and keep things simple. I agree, however, that written contract simplifies business relationships, but I am pessimistic about the ability of small businesses to get written agreements every time they have a deal. Let’s be realistic, they just don’t have time and resources to hire a lawyer to track their deals.