Top 5 Biggest Mistakes Relating to Contracts
Thank you for joining us for #WaffleWednesday at Live Ninja HQ! Here in an outline of my presentation.
Having No Contract
- It is a huge mistake not to have a written contract. The reason is that verbal agreements are not always effective, for instance because of the subject matter. (Real estate contracts must be in writing, for instance.) Moreover, enforcement of a contract requires that you sue the person who breached. If the agreement is verbal, then the evidence is also verbal and people can forget, lie, or refuse to state evidence in your favor.
- In other words, handshakes are hard to enforce.
- Nothing is usually not better than something.
Signing a Contract Without a Lawyer’s Review
- Even if English is your first language, all of the jargon can be extremely confusing. Sometimes the jargon is designed to confuse you into accepting bad terms.
- Even if a lawyer DOES review, all lawyers are not created equal. A “lightweight” can get you into a bad contract. (e.g. retail shop, investor + 2 operators with NY lawyer = disaster)
- Would you walk into the gym and fight Mike Tyson?
Copying from the Internet
- Contracts posted on the internet were not tailored to your specific needs. Just because the contract looks fancy does not mean it protects you. Even lawyers make mistakes copying contracts.
- Something can be WORSE than nothing. e.g. arbitration clause, requires that you pay the judge and filing fees and costs are prohibitive.
- Include by reference a procedural regime that are very strict
- Arbitrators cost $500/hr or more
- Fewer lawyers available to use because it is outside the norm
- It is often cheaper, if slower, to go through courts. Tax dollars pay for judges and staff to enable you to enforce your rights.
Allowing the Other Party to Prepare your Contract
- If you had a lawyer prepare your contract, only make changes if you run them by the lawyer.
- A seemingly minor change can completely annihilate the meaning of the contract (e.g. construction contract, wrote in “Florida lien law applies” and it destroyed the whole meaning)
No Attorney’s Fee Provision
- It is critical to award attorney’s fees to the winner of a lawsuit because it discourages frivolous lawsuits and empowers you to sue because you can win back your fees.
For additional resources, please consult our blogs and videos, especially these that are relevant to business contracts.
Here is a list of some contracts that we can provide.
Keep It Secret, Keep It Safe: How to Protect Trade Secrets with a Nondisclosure Agreement
Keep It Secret, Keep It Safe: How to Protect Trade Secrets with a Nondisclosure Agreement
https://jmuirandassociates.com/preventing-employees-becoming-liabilities-4-key-benefits-using-non-compete-agreements/