If you run a small business, it’s inescapable: you’re going to need to draft contracts. At the very least, you’ll need contracts when you hire employees. It’s just part of doing business. It’s a good thing, actually, because it ensures that you’re protected in case an issue arises. However, writing a rock solid contract isn’t as cut and dry as it may seem.
So let’s boil it down to its most basic parts. There are two things that always must be at the front of your mind when you’re drafting a contract. First, does the contract address every possibility, no matter how insignificant? And second, is there any wording that could be open to interpretation?
Those two rules of thumb can be broken down further into a few key elements:
- Forget the legalese. Most rookies think that a contract has to be full of legal terms. On the contrary, plain English is better as it spells things out for both parties in a language they can understand and agree to.
- Details, details, details. They say the devil is in the details and that’s never truer than with contracts. Be clear, concise and specific. Include everything, even if it seems self-explanatory.
- Have an out. Be sure to include provisions that address what will happen if one side doesn’t hold up its end of the bargain.
- Think about confidentiality. If the contract contains vital information about your business, be sure to add a clause to the contract stating that the information must remain confidential.
Writing great contracts can make or break your business. That’s why it can be in your best interests to consult with an attorney for drafting or reviewing the terms before everyone signs on the dotted line.