Over time, we can all build bad habits and not be as diligent as we should be to protect our largest assets. Having well-drafted contracts is an area where both new and established businesses need the guidance of experienced business counsel.     


Contracts are important documents that can protect your business interests and help avoid disputes down the road. However, poorly written contracts can end up costing companies far more money than they would have paid if they had hired the right people to draft and/or negotiate the contract initially. 


Today, we discuss three bad contract habits that your business needs to break:  


  • Using unclear or ambiguous terms 
  • Not including dispute resolution and fee recovery provisions
  • Not including breach notice and cure provisions  


You have worked hard to build your company, and therefore you should do everything you can to protect it. Keeping these common contractual issues in mind can help to prevent potential litigation.   


1. Using Unclear or Ambiguous Terms


The heart of a contract is in the terms. Contract terms define what the parties really agree to and what their obligations are, and everything included in a business contract should be well-defined and as clear as possible. Using unclear or ambiguous terms leaves a lot open to interpretation, which can lead to business disputes and costly, time-consuming litigation. 


When writing a contract, it is essential to write clearly and concisely.  Define all unique terms.   Even if there is a term that is common in your industry, but is otherwise unique and important to the agreement, make sure to clearly define it in plain English. It is key that no room is left for interpretation to ensure clear understanding by all parties when the contract is executed.  Without a “meeting of the minds,” a contract is likely not enforceable.   


2. Not Including Appropriate Dispute Resolution & Expense Recovery Provisions


In business, you have to plan for every eventuality.  We all expect things to run smoothly, but when things don’t, your contract must include specific details governing the methods and obligations for resolution of contract disputes.  Most importantly, there must be a provision that establishes recovery of attorneys’ fees and expenses for the winning party against the loser in the event of a contract dispute.  These provisions can help keep business disagreements from turning into full-blown, costly disputes.  


These provisions are essential to ensure that the business is protected financially in the event that a dispute arises. Remember, plan for the best, and prepare for the worst.

Read More > Common Business Disputes That Lead to Litigation 


3. Not Including Notice of Breach


Every contact should include guidelines for giving the parties notice of an alleged breach – meaning one party’s failure to fulfill a duty or obligation under the contract.  Notice of breach provisions provide an opportunity to cure (or fix) the alleged breach and salvage the situation before litigation is initiated or other dispute resolution mechanisms are triggered.  By requiring notice, your can hopefully fix the breach before being forced into litigation.  


Call The Frazer Firm Today 

When preparing contracts, it is essential that there is no ambiguity and that the contract clearly expresses the parties’ intentions.   The experienced business attorneys at The Frazer Firm will make sure your business has strong contracts that provide legal protection and reduce the potential for costly litigation.   


Contact our Jupiter, Florida based business lawyers today at (561) 295-1551 to learn how we can help your business draft and negotiate the best agreements.  Our business is protecting yours. With The Frazer Firm you can have peace of mind and focus on what really matters—growing your company.  

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