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5 contract details that help prevent disputes

On Behalf of | Aug 21, 2023 | Business Litigation

Business contracts govern many aspects of partnerships, service agreements and general professional relationships. Well-crafted contracts reduce conflict, provide a foundation for healthy business interactions and set expectations. Unfortunately, sometimes disputes still happen.

Reduce your risk of disputes and potential litigation with these details in your business contracts.

1. Define the scope of services

A clear business contract includes extensive details about the scope of the services or products provided under the contract terms. Specify quantities, quality, condition and any modifications requested. Clear details of the contract scope reduces the risk of misunderstandings.

2. Establish milestones and a completion timeline

When the parties in a contractual agreement understand what to expect when, it reduces uncertainty and anxiety. Include defined milestones and a progression timeline so everyone can monitor the success of the project and prevent delays.

3. Address the payment terms

Payment terms are important in a business contract. Clearly establish the expectations for amounts, payment dates and acceptable payment methods. This reduces the risk of delayed payment issues.

4. Assign ownership of intellectual property

Intellectual property leads to many business disputes from unclear contracts that fail to protect IP ownership rights. Include details about IP rights retention and future usage in your contract.

5. Provide exit clauses

Business deals sometimes fall through and a contractual agreement with an exit clause allows for that possibility. Include avenues for either party to terminate the contract under the specific provisions allowed.

Craft your business contracts carefully to ensure their validity, enforceability and adequate protections. Include these elements to reduce your risk of legal challenges.