How to Protect Against Breach of Contract Claims
If you own a small business in the Bay area, you know how careful you have to be when it comes to protecting your margins and keeping costs low. Nothing can impede all of that hard work like an unexpected lawsuit. Even if you are able to win in court, you may still have legal fees and possible reputational harm to worry about, which can be costly for a growing business. For this reason, the best way to protect against breach of contract claims is to reduce the likelihood of them happening in the first place. While it is not possible to control everything, taking certain precautions can dramatically reduce the possibility of having to deal with breach of contract claims and can reduce the cost of doing so when they arise.
Always use written contracts.
You may be tempted to do business in good faith or on a handshake alone, however, if you want to protect your business against breach of contract claims, having contracts in writing is critical. Get in the habit of using contracts to clarify and cement every working relationship that you have. This means having contracts with employees, independent contractors, contractors, suppliers, manufacturers, and anyone else that you have a professional relationship with. You may think that this step takes too much time or money initially, however, it will save you immeasurably in the long run. In many cases, just having formal contracts discourages illegal or inconsistent behavior.
Have a lawyer draft and review your contracts.
You may be tempted to just Google a template for the kind of contract that you need, however, that may be inadequate to protect against the kind of harm that you are concerned about. Contracts are legal documents that must follow specific criteria in order to be valid and enforceable. They also provide opportunities to custom-tailor a business relationship in the way that is most advantageous to you. Utilizing an experienced attorney helps ensures that your contract will be valid and enforceable, while protecting and supporting your business goals.
Consider external counsel.
If you cannot yet afford to have a lawyer on staff, don’t worry. Hiring external counsel is a great way to ensure that you will get the legal help and support that you need, and only have to pay for legal support when you need it. You can have an attorney on call to draft and review contracts for your business, as well as to advise you on other relevant matters relating to your company.
Use clear and complete language.
A contract is ineffective if both parties do not have the same understanding of the terms. It’s important to make sure that the language is clear and that it cannot be interpreted in more than one way. Also make sure that the terms are exhaustive and cover every situation, including how a breach of contract should be handled. You can include an arbitration clause that keeps the other party from suing you in court should a dispute related to the contract arise. If the other party does not speak English as their native language, be sure to hire a translator to ensure that the language is clear and means the same thing to both you and the other party.
Contact Coepio Legal, Inc. to Schedule a Consultation Today
If you own a small business and want to strengthen your business while limiting your liability, contact the experienced business attorneys at Coepio Legal, Inc. today to schedule a consultation.
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