Business planning, Lachlan McKnight, Legal, Management, Mentor

What to do before you sign a contract

StartupSmart /

At LegalVision we assist start-ups and SMEs with a wide variety of legal matters. Unfortunately, one of the most common matters our network of lawyers assists with is advising customers who have signed a legal contract without proper care.

 

Extricating customers from such contracts can be very difficult, and usually quite costly. In order to help readers avoid these pitfalls, we thought it would be handy to put together a quick list of steps to take before you sign a contract.

 

1. Read, read, read

 

It’s an unfortunate fact of life that most people just don’t bother reading contracts properly before signing them. In your personal life this might not matter that much (who’s actually read Facebook’s terms?!), but in a business context it’s both dumb and lazy to not read your business contracts before signing them.

 

2. Don’t rush

 

In a sales situation, the salesperson obviously wants to close the deal as quickly as possible. This can happen when you’re buying some stationary, or when you’re purchasing a franchise. We see a lot of customers who have been pressured into a purchase which they would not have made if they’d spent a bit more time thinking about the details.

 

3. Use a lawyer

 

If you’re entering into an important contract that will affect the success of your business, then it’s worth having a lawyer review it and advise you on it. These days it’s possible to find a contract lawyer who will complete a review of the contract in question for a relatively low fixed fee.

 

Shop around, and don’t be intimidated. If at all possible, try not to instruct a lawyer who’s working on an hourly rate. If you just need a contract reviewed there’s no reason why the lawyer shouldn’t be able to provide you with a fixed-fee price. Of course if you want the lawyer to negotiate on your behalf, this becomes a little more difficult to do.

 

4. Negotiate

 

If you want to do a deal with a potential customer or supplier, it’s likely that they want to do the deal as well. There’s therefore a good chance that they will be willing to negotiate. If there are a few points in the contract that you’re uncomfortable with, ask for them to be changed.

 

To conclude

 

As a business person, you want to get on and generate revenue. Sometimes the details and fine print of a legal contract can seem both uninteresting and unimportant.

 

Unfortunately, this viewpoint is a mistake. Before you sign a contract, make sure you take, or at least consider, each of the four steps set out in this article. You will save yourself both time and money in the long run.

Advertisement

We Recommend

FROM AROUND THE WEB