The importance written business contracts to entrepreneurs

Business relationships are best protected with written agreements (business contracts). The right legal documents help you avoid employee and contract disputes and limit or avoid liability. Contracts also protect both your information and ideas from being used by a third-party or competitor.                                           

A contract is a legally binding agreement between the parties concerned. They are usually written documents, though in some cases, it may be verbal. in such a case, it is called an oral contract – which is commonly used in Cameroon and called verbal contract. Small business contracts which include leases and independent contractor agreements are mostly written documents. Some contracts may be verbal or implied and still be legally binding. Not all contracts made have to be written down before it can be legally enforceable. However, it’s usually in a business owners best interest to have written documentation of all of their business agreements, because verbal contracts are more difficult to prove in the event of a breach.

Every business owner needs to know about contracts and agreements because they are part of running a business. Unless you have the right training, you need the services of commercial lawyers to draft your contract or at least go through to ensure that the contracts are legal and fair. This will help keep you out of trouble if the case arises.

If you’re a business owner, you’ll come across several types of business contracts, covering everything from equipment leases to employment agreements. That notwithstanding, almost all business contracts fall into one of three categories: 

  • general business contracts
  • sales-related contracts and 
  • employment contracts

Many of the relationships and circumstances that business owners however deal with are covered by different types of business contracts. In some cases, these contracts are self-explanatory and easily understood, but if you’re unsure about the types of contracts you need for your particular business, you may want to consult a lawyer experienced in business law.

A business owner may be able to draft and negotiate the terms of a contract on their own. However, commercial leases, and contracts with employees and independent contractors can have complicated terms that need to be drafted properly and in accordance with national laws. 

Read Also: 4 Reasons Startups Need To Make Employment Contracts

If you are a business owner and you want to make a good business contract or agreement then make use of these points:

  •  Get your contract in writing 
  • Try to keep it simple 
  • Deal with the right person that has the authority to bind the contract 
  • Make sure to identify each party correctly 
  • Detail the rights and obligations of each party
  •  Specify payment obligations 
  • Make sure to agree on circumstances that can terminate the contract
  • Agree on how to resolve disputes 
  • Pick a law to govern the contract
  • Keep it confidential
By Barrister Smith Mofor N. 

This article contains general legal information and does not contain legal advice. Specialist advice should be sought about your specific circumstances.

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