Are You Ready to Sign That Contract? Do These 5 Things First

 

Partnerships are a great way to improve the efficiency of company processes and an excellent opportunity to forge mutually beneficial business relationships.  

Congratulations on your newly found partnership! 

I know your team is probably ready to handle their duties and all resources that will ensure the success of the partnership are in place.

However, before you sign the contract and seal the deal, you need to do these five crucial things first.

Let us delve into specifics.

Have Your Contract Management Software Ready

Since we are signing a written contract, how you store them is of the utmost importance. 

Gone are the days when companies stored contracts in cabinets and other physical spaces. Also, the use of shared drives is quickly becoming unpopular.

Considering that businesses are on an unending quest to network and form fruitful partnerships, companies can have thousands of contracts. As such, investing in contract management software is a surefire way to ensure you have a single repository for all your contracts.

Contractsafe.com is one such platform that allows you to manage all your contractual agreements easily. The application has speed-search capabilities, allowing you to find a contract within seconds. Additionally, contract management software has reporting tools that you can use for analytics and several other advanced features such as reminders to help streamline processes.

2.       Read the Contract and Read Again

Just because you trust your partner to perform their duties and responsibilities doesn’t mean that you should trust that they have your best interest at heart. As such, you should always read your contract multiple times.

Do be too quick to only read about the financial interests you stand to gain. Go through every sentence of the contract, reading each clause carefully to gain a deeper understanding. 

Do not forget to go through the fine print!

Unfortunately, many people are quick to assume that every fine print is the same. The fact is the fine print changes with every contract. For example, the arbitration clause is one section of the fine print that you should pay particular interest to. Often, the clause protects the interests of the parties. However, sometimes, it may limit your rights in the case of misunderstandings that arise. It may limit the type of arbitration services you use, which could go against your constitutional rights.

Furthermore, reading your contract allows you to confirm that each party’s duties and responsibilities are clearly defined. Also, you will identify any errors in the draft that can be corrected before signing.

3.       Have Your Lawyer Present

As a seasoned entrepreneur, you may understand the business language, how to run a compliant business, what to do when partnership disagreements occur, and many more. However, you may not understand the intricacies of contractual agreements.

The complexities of contracts are undeniable. For starters, contracts contain boilerplate language that changes every now and then. Also, the government regularly imposes new policies that regulate contractual agreements in terms of employee safety, among other things.

A lawyer who understands the intricacies of your specific agreements will break down the legal jargon for you. They will go through the contract to see whether there are hidden clauses that are likely to hurt your business.    

4.       Confirm Personal Details

Confirming your personal details seems like a no-brainer. However, you will be surprised at how many business owners don’t pay attention to it.

Before you sign any agreement, make sure that everyone’s details are correct. From their legal names to their contact details and obligations, having the right personal details eliminates unnecessary stress. 

For instance, if one party has breached the contract or you want to terminate it for other reasons, having the wrong details will be a stumbling block in the arbitration process. Your complaints will not stand as the contract might be declared null and void.

5.       Understand Your Right and Obligations

Partnership disagreements are never shocking. They are actually common.

So, whether you are forging a partnership with a childhood friend or relative, understanding your rights and obligations is imperative.

Your rights are the actions that you are entitled to in case your partner(s) breaches their contract. Understanding them allows you to know which actions to take to safeguard your business and its finances.

On the other hand, obligations are actions that you must take in case you breach the contract. Obligations can be fines or any other forms of compensation, entitled to your partners.

Conclusion

These are only some of the vital things you should consider before signing your contract. Remember that contracts are binding agreements that might subject you to significant losses. So, take your time to understand its contents. Never sign it until you are positive it’s the ideal partnership for you.

Last but not least, avoid leaving blank spaces on the form where an unscrupulous person might add unauthorized information. Also, remember to have a copy of the same.