The Importance of Contracts
Contracts are a foundational component of a well-run business and one of the most important to get right from the beginning. Contracts make transactions simpler because all parties have a written understanding of their rights and responsibilities. They make relationships with employees, independent contractors, vendors, and clients more seamless by getting everyone on the same page regarding what is expected of them and what will be delivered.
It is hard to overstate the value that a well-drafted contract can make. On one hand, contracts help prevent disputes from occurring because the parties all agreed to and signed the same contract. There's no need to dig through old text messages and emails to see who made what promises - the contract is the final word. While no contract can avoid every possible dispute, a well-drafted contract considers the most important components of the transaction or relationship, anticipates areas where disputes could arise, and minimizes potential risks or areas of confusion.
The Secret Sauce
With a growing business that has moved beyond the startup phase, one of the top priorities for legal spend is drafting contracts and templates tailored to the business. Contracts are the foundation of solid legal protection for many companies. They help: 1) prevent confusion which leads to disputes (i.e. lost profits and extra legal expense defending claims), 2) provide a template to streamline processes, and 3) identify and reduce liability and risk as much as possible. Ask us about conducting an audit of your existing business contracts.
Our Approach to Drafting Contracts
There is no one-size-fits-all when it comes to contracts. Different companies can have very different goals, business models, appetite for risk, and levels of sophistication. The contracts involved in the purchase and sale of a dental practice will be wildly different than the contracts involved in the sale of a publicly-traded, $100-million software company. This is also the reason why it can be dangerous to find a contract sample/template online and swap out the names and figures. While the type of contract may be the same, there's no way to tell what goals the original drafter had in mind. For example, was it drafted in favor of the company or the client? Were there specific risks and goals in mind? Are the laws governing contracts the same in your state as they are in the state where the transaction took place?
For those reasons (and many others) we emphasize developing a deep understanding of your business, plans, and goals for the contract or transaction. These factors can and should be woven into the fabric of the contract. We make sure to highlight key provisions within the contract and explain the impact they will have. We also do everything we can to draft contracts in clear, concise language, avoiding legalese wherever possible. An effective contract has terms that are easily understood so that there is no confusion about what was intended when it was written. In our opinion, that's just good business.
Contracts We Commonly Draft or Review
Have questions about a specific contract(s)?