Contracts are a crucial aspect of business dealings, and they are used to ensure that both parties have a mutual understanding and are agreeing to the same terms and conditions as expected. Many business owners are inclined to sign contracts without proper review, assuming that the contract is standard, covers the key elements and that everything is above board and fair. However, as you already know, things are not always what they seem, and unsuspecting business owners have many times found out all too late that the agreement signed, did not work out as anticipated. Having an attorney review your contract before signing is an essential step in protecting yourself from unwanted obligations, legal complications and lawsuits. In this blog, we will delve into the reasons why having an attorney review your contract is crucial to your business success and peace of mind. It's like insurance, no one wants to pay for it, but they are sure glad they did when they need it most.
Attorneys Provide Experienced Contract Legal Advice
The primary reason for having an attorney review your contract is to receive the benefit of their experience and expertise. Many attorneys specialize in contract law and possess the necessary skills to interpret the legal jargon present in most contracts. They can identify any loopholes, hidden clauses, or vague terms that may cause legal complications. Lawyers have an eye for detail, and they can spot any irregularities in the contract before you sign it, ensuring that everything is in your best interest. Some areas where an experienced contract attorney can help are:
Identification and Clarification of Ambiguous Terms
Legal language can be complicated and challenging to understand, especially for non-lawyers. Many times, terms used in common everyday language have a specific meaning in the eyes of the law. This causes ambiguity in the parties understanding of a contract. Ambiguous terms can lead to various interpretations, which then cause disputes. An experienced contract attorney can help you identify those ambiguous terms, find out what your understanding and wishes for the contract are, and then provide alternative language that can clarify this meaning and ensure you receive the bargain you were hoping for. For example, an attorney can spot phrases such as "reasonable," "best efforts," or "good faith" that may be vague and subject to different interpretations. The attorney can then help to draft more concise language so that this ambiguity is either minimized or erased. This reduces the risk of disputes that would arise from misinterpretation, and helps to build a positive business relationship between both parties; one that just might lead to more business!
Compliance with legal requirements
Based on your location and industry, contracts must follow specific legal requirements. Compliance involves adhering to principles such as labor laws, environmental issues, and privacy regulations. For instance, employment agreements must comply with employment laws like worker's compensation and equal opportunity laws. If the contract violates any laws, an attorney can advise you on how to revise the contract to comply adequately. Further, Contracts that do not align with these requirements are usually unenforceable in a court of law.
Review of Contract Structure
The structure of a contract is essential because it outlines the rights and obligations of each party. An attorney reviewing your contract will pay attention to the contract structure to ensure that it meets your needs. For example, commercial agreements may need various critical sections, such as payment terms, limitations of liability, termination, intellectual property and confidentiality. A contract attorney can check to ensure your contract contains the appropriate language in the appropriate sections, and ensure that those paragraphs are comprehensive and do not conflict with each other.
Identify and Address Potential Risk
All contracts are subject to interpretation and therefore risk. An experienced contract attorney can help you identify potential risks in the contract, prioritize those risks, and help draft solutions to mitigate those risks. A contract may have clauses that (unknowingly to you) make you liable for certain actions or damages, or it may have provisions that limit your ability to enforce your rights. By reviewing your contract with an attorney, you can mitigate risk and ensure that the contract protects your interests as best as possible.
Attorneys Provide Objectiveness, Fairness and Equity
If you decide to review your contract without legal assistance, you might miss out on essential details that are unfavorable to you. Understandably, because you are a small business owner or because you might be personally guaranteeing the contract, you have a personal attachment to the contract you are signing. This attachment or emotional stake can lead to clouded judgment and ineffective negotiation of terms that might not be in your best interest. Having a third eye on anything is always a good idea, and having an uninterested party who has no emotional attachment to the subject matter of the contract can only help to ensure the contract you sign really works for you. An Attorney can help you achieve a fair and equitable contract by negotiating the terms of the agreement with the other party, and may be able to do so in a way that makes both parties willing to enter into future business together.
Attorneys Can Protect Your Intellectual Property
If you are providing a service or creating a product for a client, your intellectual property rights are essential. An attorney can help you to safeguard your intellectual property rights by including clauses in your contract that restrict the use, sharing, or duplication of your property without your consent. In addition, an attorney can also ensure that the contract language includes protections in the event you get sued by a third-party because of the conduct of the party you have contracted with. For instance, an attorney would ensure that the contract contains an indemnification clause that forces the other party to pay your legal fees or even defend against any claims if you get sued by a third-party that alleges some type of intellectual property infringement caused by the other party.
Attorneys Can Prevent Litigation
The primary goal of any contract is to prevent disputes and litigation. Nonetheless, lawsuits are common when someone feels wronged or deceived by the contract's terms. Attorneys are trained to write contracts in a way that minimizes misunderstandings and that can provide for contract provisions that make resolving disputes less expensive, less confrontational and less time-consuming. Having an attorney review your contract before signing can minimize the chances of legal conflicts and expensive court fees. As a bonus, if the other party knows you are represented during the contract process, they may be less likely to breach the contract themselves or attempt to accuse you of breaching it.
Attorneys Will Save You Time and Give You Peace of Mind
You run a business, your family and your life. You don’t have time to play lawyer, too. An attorney can review your contract more time-effectively than you. By having an attorney review your contract, you stick to doing what you do best; you. This leaves more time for family and work, and less time worrying about what if's.
Having an attorney review your contract before signing is an essential step towards ensuring that you are prioritizing your best interests. Ultimately, a thorough contract review provides the protection you need and minimizes any risk against legal complications down the line. Intellequity can provide contract review services that offer experienced legal advice, objectiveness, protection of your intellectual property, reduced risk and litigation, and will save you time. Intellequity can make all the difference between a beneficial agreement and a very costly mistake.
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