Mistake 1: Improperly Signing a Business Contract
The biggest mistake that business owners make with business contracts is failing to sign the proper way. If you only sign your name on the contract, then you didn’t obligate your business, you obligated yourself. You went to all of this trouble to set up a business, so use it!
So, if you sign a contract that’s for your business, sign it with the business name, your name, and your title. For example, XYZ Corporation, John Walker, President. That obligates the business, not me personally.
Mistake 2: Not Clearly Stating What is Supposed to be Done
The second biggest mistake is failing to clearly define what it is supposed to be done in this agreement. Spell out who is going to do what, by when, under what conditions, and over what period of time. Also, don’t forget to include how much it’s all going to cost.
Mistake 3: Failing to Pay Attention and Not Read the Boiler Plate
The third mistake that business owners make regarding their contracts is failing to respect the boiler plate. The boiler plate is that legalese at the end of the contract that pretty much everybody hates. It’s, however, extremely necessary and important to making sure that the agreement that you think you have is actually enforceable.
The boiler plate will say such things like, if we get into a dispute we’re going to settle it in Houston with Texas law. It says that if you’re obligated to pay me and if I choose to cut you some slack once, that doesn’t mean you always get to pay late. It also says that our entire agreement between us is what’s contained in the contract, not what we said some place else.
Lastly, the boiler plate states if part of the contract is invalid the whole thing is not invalid. That’s boiler plate and it’s critical to making sure that you actually have an enforceable agreement not just a bunch of words on paper.
If you’re in need of contract review and drafting, call us today and we can set up a time with our Principal Attorney John Walker to help guide you through this process.