MONEY
Mastering Contracts
from it and try again with another person or
business.
Does the contract do what you want? Your
business goals should be clear to you before
signing a contract for anything, from buying a
fax machine for your office to supplying tons
N
egotiating, understanding, and signing
contracts are some of the most important
of paper to a printing company. Then read the
tasks you can do to help your business run
contract to see where it may not meet your
smoothly and meet your goals. Dealing with
needs. Try to change those things so they
contracts may not be a lot of fun, but some
match your goals.
careful thought along with “reading the fine
print” can really pay off. Here are some points to
Can I change the contract? It never hurts to try
consider:
to make a contract work better for you. Cross
out or change the parts of the draft contract
Do you need a contract? In short, YES. Verbal
that you don’t like and ask for the other party’s
agreements are seldom enforceable, so having
response. The other side can accept your
a well-crafted contract can protect you legally if
changes or make a counter-offer. This part of
things go wrong. A contract sets out the rights
the negotiation process often improves a deal
and obligations of all parties who sign it.
for both sides.
What makes a contract? A valid contract
Is the contract flexible? Can you think of
requires three things: 1) A genuine offer (an
things that might reasonably happen but
offer that a reasonable person believes can
aren’t mentioned in the contract? For example,
be fulfilled); 2) Acceptance of that offer; and
businesses along the Gulf Coast ought to
3) “Consideration,” something given by one
anticipate temporary or even permanent work
person to the other in return for the offer. If any
shutdowns due to hurricanes. While that’s an
one of these is missing, there is no contract.
extreme situation, you need to include wording
that protects you in case you can’t fulfill your
Is the contract good for your business?
contract obligations because of something you
Your instincts are important: if something in
can’t control.
a contract makes you uneasy, try to change it
(see below). Contracts that are fair—and “feel”
What happens if there is a dispute? Contracts
fair—to both sides can avoid later disputes. If
often include penalties for late delivery or
you aren’t satisfied with a contract, walk away
bonuses for early completion, but they should
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