Whether you are leasing out your premises, taking on employees or securing a supply of raw materials, ingredients or essential products, you need to draw up and sign contracts to make the agreement official.
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Today, we present a short checklist of the essentials you’ll need to check when you’re reviewing a legal contract, to avoid nasty surprises down the line.
The first thing you need to check is that the basic pieces of information are in place: check the party names. One party should be your business name (if you are a sole trader: your name), the other should be the name of the business entity you are contracting with.
If these are wrong, you might you are liable for something you do not or cannot provide: if you sign a contract to an employee someone under your name, rather than as your business entity, you could find yourself obliged to pay their wages personally, even if something happens to your company.
Similarly check all the quantities, amounts and dates are correct. A contract supersedes any conversations or email: if you’ve signed it you’ve legally agreed to it’s terms, and it can be difficult to challenge this, even if a signifcant change has been concealed in the fine print, so make sure it’s a contract that covers what you actually agreed in negotiation.
Look into ways the contract can be broken, by both parties. If the landlord of the property you are trying to rent has a specified a short term break clause, this could indicate that they are planning to sell, renovate or otherwise look to get you out of their property before you’re happy to leave.
On the other hand, do make sure there are ways for you to get out of the agreement if it’s not working for you. Make sure measures of success are specified: if you’re hiring someone for their promised results, make sure you give yourself the latitude to dispense with their services if they cannot deliver.
Don’t Let Yourself Be Rushed
There’s no such thing as a ‘standard contract’ and if anyone tries to convince you not to check a contract closely, this could be an indicator that you really need to. Take the time to make sure everything is right for you, and if it’s not don’t be scared to challenge, and ask for a change.