As a business owner, contracts outline how you will work with others and what you can expect from each other.
Here are some to consider when dealing with other businesses:
1. An early termination clause
You need to accept that business relationships don’t always go as smoothly as planned, and you or the other party may want to end your relationship early.
Setting out how you will do that before you begin is better than trying to work it out at the time. Remember that one side opting out can negatively affect the other, so penalties and notice periods might need to be part of the clause.
2. Exceptions to your usual agreement
Think about when you go on vacation. The holiday provider has inserted exceptions into the contract you agree to when signing the booking form. They agree to provide the services, but it’s not their responsibility if they can’t do so due to natural disasters, political unrest and the like. You need to do something similar with your clients. Otherwise, you could face legal problems if you can’t deliver for reasons beyond your control.
3. Renewal provisions
Your relationship is going great, and so is business. Then your landlord tells you they are doubling the rent, or a supplier says they’re tripling the price of a particular product. You need to use clauses to limit their ability to hike prices too much or too often.
You are going to need lots of contracts with a variety of people. Omitting clauses or signing a contract that includes unreasonable ones could be enough to scuttle all your hard work. That’s why it’s best to get legal guidance to review contracts before you commit to them.