For centuries, business deals have been sealed and ensured for centuries with one word: contract. Whether it is to limit liability at the bottom of a sales slip or to formseal a brand new partnership, the stipulations of a contract are engineered to manage risk on the part of each signer.
And though such straight forward risk management would seem of primary importance to new and small business owners and anyone preparing to start a business, many do not budget for an attorneyâs expertise in drafting contracts either because of a lack of funds or forethought.
“There are a lot of people who do their own contracts and they may not have any problems,” said Lew Goldfarb, a law professor who is leading the University of Cincinnati College of Law’s soon-to-open small business clinic.
“Contracts only become important when there is a problem or dispute," Goldfarb told BusinessNewsDaily. "If a dispute arises, they are going to wish they had consulted with an attorney.”
Any contract’s clauses, Goldfarb explained, are drafted and negotiated to fairly allocate risk and probably need the oversight of someone trained in preparing them.
But there are steps you can take to decrease the fees that are easily racked up when consulting an attorney. Doug Williams, the owner of business consulting firm Alesco Marketing, advises his clients to consider the main objectives of a proposed contract and let the lawyer handle filling in the details.
Make a list of each party’s obligations and the terms under the contract. Think about the business terms you want reflected in the contract, things like:
1) How do you describe the services or products you offer?
2) What is the specific service to be done or the product covered under the contract? Be as specific as you can.
3) What is the price the parties have settled on and what are the payment terms? Do you take cash, checks, credit cards , etc.?
“There are plenty of web resources to get you started on building your own contracts,” Williams said. There are also a variety of contract writing software programs available. “But they should always be written by an attorney, especially one who has a business perspective.”
Goldfarb said a good first step is for business owners is to get in contact with the local Bar Association, which can refer them to local pro-bono small business law clinics, specialty lawyers or other services in their communities, including Small Business Development Centers, which offer help free of charge. He said it is important to connect with an lawyer expert who knows state laws and is licensed there, as these can have a major impacts on how agreements are written. With that information, a few phone calls and some web research, business owners can get a handle on what they will need to wield successful and binding contracts for any part of their operation.
To find your local bar, go to the American Bar Association’s www.findlegalhelp.org. To find your local Small Business Development Center, visit the Small Business Administration web site at www.sba.gov.