Commercial Contracts – Essential Troubleshooting In Business

Commercial Contracts = (Equal) Business Troubleshooting

commercial contractsCommercial contracts solicitors provide practical advice with focus on your business needs, including risk assessment, thus bringing you and your business much needed protection on a rainy day; and in business, be assured that it rains very often.  Business transactions and business partnerships with family members and friends are common place.   Although there’s nothing wrong with business agreements on a handshake when you go on a joint venture with family and friends, you need a solicitor to advise you, protect you and basically make the whole deal more kosher because of the unavoidable risks involved. Consider this – you agree to go into business with your father but you and your father forget to agree on certain aspects of the business such as:

  • Who’s in charge of which area of the business?
  • What will happen to the partnership if one of you isn’t competent enough in their job role?
  • What if one of you wants to quit because of inadequacy but wants to continue with the partnership?
  • How much will each get paid?
  • Who’s the CEO?  Who’s the COO?
  • Who takes care of the legal/finance/development of the business?

The question is: what system have you got in place for the smooth running of the business and to prepare you for a rainy day?  Have you got a troubleshooting system that identifies a problem and solves it without costing you a financial setback or worse – your business?  You need to think ahead and have in place a system by which you can anticipate difficult situations and solutions in order to protect the partnership and the business.  Those decisions should protect the business, protect you and cannot turn into legal conflicts because you could end up loosing everything.  Basing your executive decisions on the memory of what’s been agreed, just simply will not do.

Forgetting When It’s Convenient and Inconvenient

Sometimes people genuinely forget important aspects of a business deal and sometimes they conveniently forget.  When people forget the nitty gritty details of a business deal, things can go very wrong for them, regardless of who your business partner is.  Did you know that Harvard Medical School have identified 7 signs of normal forgetfulness at work and in business:

  1. Transience (forgetting facts)
  2. Absentmindedness (forgetting when you don’t pay enough attention)
  3. Blocking (temporary inability to remember something)
  4. Misattribution (remembering something but misattributing some details)
  5. Suggestibility (giving in to the power of suggestion)
  6. Bias (perceptions filtered by personal biases)
  7. Persistence (tormented by unwanted memories)

Commercial Contracts – Essential Reminders In Business

So whilst your judgement has never failed you, allowing you to put your complete trust in the right people, your memory and other people’s ability to remember accurately is an entirely different matter.  You need reminders, not by way of notes in an app or calendar slots in Outlook but by a contract prepared by a solicitor specialised in commercial law.  Commercial law solicitors help you through the process of setting up a partnership or a company, or if you’re already established, they can certainly review existing contracts and implementing new terms of service and agreements.  A commercial contract stores essential reminders indispensable for the smooth running of a business.  Understand that whilst business contracts can be either verbal or written oaths, the essential aspects of a contract need to be stipulated in writing, in a document structured by a commercial law solicitor.  No business deal should be based on a verbal agreement because forgetfulness can get the better of us and we all do forget.

Commercial Contracts = Troubleshooting

commercial contractsA commercial contract works like a troubleshooter with reminders on how the company operates and what are the solutions to problems that arise, when something fails in the operation of the business.  Everything should be in writing and unless you are an expert in commercial law, the essential elements of a contract could go amiss.  For instance, you could go into partnership with someone whose expertise in their business area ends up costing the company a great financial loss.  Do you sack them, do you wait for them to resign and does that mean that they automatically loose their shareholding?  This is something you can discuss with your solicitor and agree on what should be stipulated in the contract. Commercial contracts solicitors will help you understand the daunting legal jargon in a contract, they’ll help you understand also that you need to specify payment obligations, identify shareholders, agree on ways to resolve disputes with your partners and agree on the circumstances by which you should terminate a contract.

Commercial Contracts Don’t Filter Through Reminders

Running a business means that you’re likely to enter into a contract with people a lot more often than you think, whether they’re service providers, partners in the company or members of staff.  If you agree to make a payment, or deliver a service, or promote someone, you’re entering into a verbal contract.  In short, you have to keep your word in business, so you need caution when making promises you can’t keep.  In order to cover tricky situations, you need to have a troubleshooting section of your business that helps you solve problems that will arise from time to time.  Remember that people sometimes genuinely forget and sometimes they filter through memories of a verbal agreement, but no one can dispute what’s on a written contract.  Remember that commercial contracts solicitors are there to help you run your business, advising you on every aspect of a commercial contract and helping you avoid the pitfalls of things that are left unchecked or forgotten.  By Sandra Garcao

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