It is good to enter productive partnerships in the world of business. Some contracts are specially designed for these partnerships, but you have to be extremely careful about such documentations.
Failing to do things properly in a partnership contract can cause very big problems for you. For your contract to remain valid in court and ensure your interests are protected, some elements must be included.
Some factors can render your contract to become null, void and unenforceable. Clauses for automatic renewal, financial obligations and loopholes are some of these issues. Whenever it is time for you to sign any contract, you have to pay very close attention to these parts. There are essential areas like acceptance and offer, without which an agreement will be invalid. This piece is going to dwell on how entrepreneurs can successfully avoid legal problems with their partnership contracts.
It can be an exciting and pleasant thing to sign a contract. One can do so while getting a new business deal or while opening up a new venture. It can even be related to the purchase of an asset or a joint enterprise.
Whatever may be the case, the signing is typically done after a lot of work and negotiations must have been done. But everything can turn out to become a spectacular disaster if you do not take time to carefully and adequately review what you are about to sign. Here are contract complications and how you can avoid them:
Clauses for Intellectual Property
You should consider the work of the other party if you are going to enter into any deal. To illustrate, if you are going to work with a creative professional like a writer, painter or musician, you have to ensure that you have all the rights to the intellectual property. If you do not fix this, then the content can be utilized in another location and you will be the loser at the end of it all.
Ensure you read and understand all the copyright laws’ provisions if your contract has to do with intellectual property. If you are not sure about how to go about it or see some complicated clauses, immediately engage a competent copyright lawyer’s services.
There are cases where the partnership contracts will include some fuzzy terms which upon closer inspection are nothing but cleverly-crafted loopholes that may give undue advantage to the other party. Some of the loopholes are so smartly incorporated that you may not even notice immediately. Before you sign the contract, could you go through it and every word? Call for clarification if need be and have your attorney also pore over it.
The terms and terminology used in any business contract mean a lot. Go through all the terms and conditions very carefully and have a professional do the same for you. If there are any phrases or wordings that you are not comfortable with, you have them fixed. You may need to hold several sessions with the other party before you will finally get to sign it. You must only sign when you are totally fine with the provisions of the contract.
There are times when the other party may want to rush in some revisions at the last minute. Some business partners will always try to modify the contract even without holding proper discussions with you. You have to be wary of these unplanned changes or any alterations that do not look proper.
If the other side revises, you should not just accept it; you have to go through everything and know what the revision is all about and why it was made in the first place. One of the biggest problems many have while signing a partnership contract is that they run into issues with altered arrangements.
One party can make modifications to the deal and even claim the majority or even overall majority of the enterprise while shifting you aside. Alterations can even terminate or liquidate the entire business.
These contractual modifications are very crucial, and you will need the services of an experienced business lawyer to confirm the basis of all last-minute changes or revisions. The attorney will then give you the right kind of advice. It is good to not handle everything yourself.
This can be a huge problem if not tailored out appropriately. The clause should be lucid in the discussion regarding all aspects of financial obligations. It must also give room for changes in pricing.
Signing a contract without having all these clauses in place means that you will make yourself very vulnerable. There will be legal fees paid; it must be spelled out the amount that each party will pay. This applies to all the fees, charges and all expenditures. This way, there will be no conflict regarding financial obligations.
Laws of the Land or International Laws
Whatever the business you are getting into will be regulated by local, national, or international laws. You have to make sure that everything that you are signing is legal under the law. This is going to protect you from running into any problem with the government or authorities later on. You are advised to look very carefully into this, particularly when taxes, levies, and rebates are involved. Always work with the laws of the land.
Businesses are profitable but it can be a very delicate and tricky matter when involving partners because money is involved. Signing a contract means you are getting yourself involved and if you do not get all the clauses right, you can be getting yourself into deep problems. However, with the tips that have been provided in this piece, you now know how to do away with legal loopholes while entering into any partnership contract.