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A well-written contract can save you grief in a dispute

Your relationships are often the lifeblood of your business. Whether it's with customers, vendors or other companies, you need those relationships in order for your business to thrive.

While you believe that you would only enter into arrangements in which the parties have mutual trust, no one can provide you with such a guarantee. As the old political saying goes, "Trust, but verify." You can't predict when a dispute may arise, and if you fail to properly document your agreements with the other party, you could end up suffering substantial losses.

How your contracts are written makes a difference

Getting your agreements in writing is the first step in making sure that you protect your interests in your dealings. Your contracts need to address more than just the basics. They also need to attempt to account for anything that may go wrong. Other than being in writing, you may want to consider making sure your contracts include the following:

  • The language needs to be as clear and concise as possible. Everyone should understand the terms, and you may want to leave as little as possible open to interpretation.
  • If your dealings with the other party could possibly expose your trade secrets or other sensitive information, you may want to include provisions regarding confidentiality.
  • Payment is often one of the most contentious parts of any contract. It may help to make sure that the terms regarding payment, and what those payments are for, are outlined as specifically as possible.
  • If you don't intend for the relationship to be perpetual, then you need to include provisions regarding how to terminate the contract. You may also want to specify under what terms each party can walk away from the contract without penalty or threat of litigation.
  • If you would rather not head directly for a courtroom in the event of a dispute, consider including provisions regarding the use of mediation or arbitration first.
  • You may also want to include provisions regarding attorney's fees and the costs associated with resolving any disputes.
  • Your choice of law also makes a difference. If you want the laws of Texas to govern your contract, then you need to include a provision stating it.

These are just the general provisions you may want to include in your contracts. You may have concerns specific to the deal you make with the other party. Your contracts can include provisions that refer to a certain set of circumstances. If you aren't sure how to create a contract that protects your rights and interests -- and covers all of the necessary topics and concerns --, it may be beneficial to make use of the legal resources available to you.

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329 South Guadalupe Street
San Marcos, TX 78666

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