Forging new business relationships can be very rewarding for someone starting or running a business. However, any commercial lawyer will be able to confirm that the strength of the relationships, legally speaking, is only as sound and credible as the quality of written and binding agreements. A poorly drafted contract can result in misinterpretation, a number of associated disputes, the dissolving of meaningful relationships and even law suits. All this can often be avoided by simply enlisting appropriate legal services.
Importance of legally sound business agreements
- A typical start-up or small business has formal and informal contractual relationships with its customers, vendors, partners and employees. Business owners owe a duty to each other to grow the business, treat each other fairly and divide the profits equitably. Without properly drafted legal documents, the business owners will often have misunderstandings about the terms of the business relationship. The failure of reducing the terms to a drafted agreement complicates matters as there is no tangible and reliable document that one can refer to. While an oral agreement may- arguably- be in place, the terms and conditions of these can be difficult to prove.
- A professionally drafted business agreement thus offers several noteworthy benefits. It will help business owners manage risk, avoid unnecessary disputes, limit liability and avoid unintended legal obligations. Professionally drafted agreements also mean that follow up agreements, amendments, and related matters can be easily attended to by the commercial lawyer, who is already familiar with the facts surrounding the relationships.
- A successful business will at some stage need to engage the legal services of a commercial lawyer. The lawyer will advise businesses on the contracts that govern day- to- day relationships with third parties, and amongst business owners. They will also be able to advise on applicable statutes, imminent legal changes, the relevance of specific clauses and interpretation of others.
What is a valid contract or agreement?
- A valid contract or agreement is one that is legally enforceable. There must be an offer, acceptance and mutual consent, and such “consent” must be completely out of their free will. Apart from stipulated duties, responsibilities and obligations of the parties, they must also be of sound mind. To find out more about the requirements of a valid agreement, you can discuss same with an experienced commercial lawyer who will be able to explain the ins and outs of agreements.
- Although a professional, legally sound business agreement might not always be the first priority to some when growing a business, especially when you’ve been accustomed to concluding most agreements with a handshake – it is certainly not an aspect that you can afford to ignore for long. Investing in quality legal expertise and well drafted agreements will lay the very foundation for successful long-term business relationships.