When you start a new business, you need focus. The vast number of details that must be taken care of can distract your main job of getting your business up and running. At the same time, many “little” issues may not seem important or critical at the time, but can cause much larger problems if left unattended.
Contracts are the heart of a business, because they define your rights and obligations in every transaction. When your business is new, you may want to offer a handshake and quickly outline the transaction. But you want to be certain your business agreements protect your business and prevent litigation.
While may seem odd that an attorney would be offering advice on how to minimize litigation, for a business, it is essential. It is paramount that you have the time and energy to operate your business.
Litigation can be time consuming and distracting, removing your focus from your business operations and driving up your litigation expenses. While you need to be passionate about your business and selling yourself to your customers, you must view litigation with a cold, dispassionate eye, assessing your total exposure and your likelihood of success.
It is essential that you understand terms or obligations within a contract, and if another entity has presented you with a contract, you should have your own attorney review the document.
Questions of ambiguity or undefined terms with in contract can cause endless headaches and uncontrolled expenses. With these matters, an ounce of prevention is worth a pound of cure.
By creating comprehensive contracts that accurately encompass your transactions, you can reduce your exposure to potential litigation.
Source: Orlando Business Journal, “18 legal mistakes business owners make that can cripple their companies,” David Bates, December 6, 2013