Review Your Business Contracts Frequently to Ward off Problems
Contractual relationships are the backbone of a successful business. Unfortunately, many business owners are stretched so thin that reviewing contracts gets put on the back burner – especially during these chaotic times. It can be easy to overlook contract renewals or proceed with a renewal without updating or negotiating the contract terms.
Business contracts should be checked frequently to account for changing needs, increased expenses, and other concerns. Failing to regularly review and modify contracts as needed can cost business owners precious time and money.
Contract Review and Negotiation is Not a One-Time Event
Drafting strong contracts is fundamental to growing a successful business. Partnership agreements, employment contracts, independent contractor agreements, nondisclosure agreements, leases, bills of sale, purchase orders, and other contracts are the keystone of positive business relationships. Contracts not only define the terms of an agreement, but also ensure that all parties understand their rights and responsibilities.
Unfortunately, many business owners and business leaders fall into the same pitfall: They negotiate a strong contract but never revisit the contract to update it. This can lead to unnecessary financial losses, frustration, confusion, and even legal disputes.
Business owners should periodically review contracts to look for ambiguous language and vague terms. They should make sure that any contractual terms are in line with the business’s current needs and objectives. Property and equipment leases and other contracts that are automatically renewed should always be assessed before the renewal date. Otherwise, owners can find themselves trapped in an agreement that is no longer serving the business.
Employment agreements should be reviewed and modified to account for changes in employment terms, benefits, and other employee matters. Most importantly, business contracts should be reviewed anytime there are changes to local, state, or federal laws, regulations, or licensing requirements.
Contact Our Naperville Business Law Attorneys
Strong contracts can propel your company toward success. However, failing to periodically review contracts can lead to unnecessary financial losses, ineffective contracts, strained business relationships, and avoidable legal disputes.
At the Gierach Law Firm, our Naperville business lawyers know that contract review and negotiation is an ongoing process. We regularly work with business owners who rely on us to take this responsibility off their already-full plates.
If your company is not large enough to justify in-house legal counsel, consider utilizing our outsourced general counsel program YourOCG.
Call 630-756-1160 for a confidential consultation to learn more.
Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.