Whether you’re a landlord at a small apartment complex or the owner of an up-and-coming independent business, contracts are very important to keeping a flow of business and income.  Making agreements via leases and contracts are the most business official way to make deals and propriate an action.  There is great importance in upholding these contracts for all parties involved.

Upholding the Deal

Upholding the terms and agreements of a contract is vital to those who sign and agree to it, not only for the face and integrity of their representation but also for legal purposes.  Contractual agreements are for lack of a better word, a negotiation.  Two or more parties convened to propose, debate, and compromise on an outline of details.  This means that there is a definite awareness of what all a contract entails.  Although these negotiations can take a very long time, sometimes weeks or months, they are worth it in the end because they will hold up when an action is questioned.  To ensure that a specific level of services are met, contracts are applied between a business and a client.

Aspects of a Contract

There are a couple different aspects that usually accompany a contract.  Some common ones are:

• Cost

• Time/Deadline

• Quality Assured

• Confidentiality

These are usually the most important outlines of a contract.  Not only do they assure that whatever issues the contract is resolving operate upon  foundations agreed on by both parties, but they allow a base line for examination on what is falling short or being unmet in the event of legal action being taken.  Small businesses understand that a frequent flow of income is beneficial for a number of reasons.  Contracts allow this to be possible.  For example, a small business offering a supply of goods or services may negotiate a contract with a client saying that the business will supply this offer a certain amount of times, this well, for this much money, for this long.  Now, assuming the client upholds their end of the contract, this small business has at least one guaranteed income for that allotted amount of time (assuming they hold up their end of the contract as well).

"What Happens if I Breach the Contract?"

Legal actions against parties who do not hold up their end of a contractual deal happen every day.  Whether it is an entertainer, a company, or a private investor, no one is exempt from following through with a contractual obligation unless proper termination procedures are taken.  There is legal process in which both parties can agree to nullify or terminate a contract.  This can come usually from either a negotiated termination or in some cases a buy out.  In fact, even the United States Government allows buyouts of federal contracts.  It is technically legal for an enlisted soldier to buy themselves out of their contractual duties to the U.S. armed forces.  Granted, that would cost hundreds of thousands of dollars it is still possible because like all contracts, negotiations are inevitable.  

There are a few things that a small business should remember when either constructing or negotiating a contract with a client:

• Have an attorney involved to read/review anything being proposed

• Make sure everything is understood, anything confusing or unclear should be clarified prior to signing

• Clearly outline all important information surrounding the negotiation.  Times, dates, prices, levels of service, and anything else that sums up the overall picture of what the contract is assuring.

Contracts are a great way to protect a business and its assets.  It is important to have them because contracts hold up strong in a legal case against an opposing party if an agreement is not met.  It is always urged that if you are constructing or becoming involved in a business contract that you seek legal advice.  There are usually a number of legal terms and law vernacular that can be decoded by a trustworthy attorney.  Don’t get caught in a contract that isn’t what you bargained for.

Zane Schwarzlose is a blogger at Colley and Colley, LLP, a personal injury law firm in Austin, Texas. Zane has never had to enter into a contract, other than a lease.