I love contracts but this was not always so! I am sure I am not the only one that hated the idea of long, wordy agreements. Back then I suffered from ‘Contract Phobia’ and that’s okay. We all have our share of things we fear. Over the years I have found that the main reasons why people dislike contracts in business are simply the fear of commitment as well as the lengthy documents that have way too many legal terms.
Personally, I am turned away by any contract that is more than 3 pages even though I am a certified Paralegal. So how did I get over my fear? Well, I needed to understand why contracts were so important in the first place.
- Contracts help us to outline the scope of the agreement. In business, it can state what is expected, how you will get compensated, the contractual period, and the conditions under which termination can and will be handled.
- Contracts also help to protect both parties. Yep! A good contract helps both parties put their expectations in writing and also speaks to how the parties can deal with any disagreements that may arise.
- Contracts are great references! Just in case one of the agreeing parties forgot the terms and conditions, these written agreements are there as reminders!
- Contracts help us to reduce the chance of expensive and time-consuming court proceedings. Without a contract, it comes down to “He said this, she said that…”
So now I am feeling better, I am not as scared anymore. My next step was to ask for help to read and understand contracts.
Don’t sign it until you understand it!
- Do NOT sign a contract if you do not understand it!
- A contract must have all terms clearly stated and answer any and all questions related to any situation that could arise.
- Difficult and lengthy contracts normally come with a breakdown of legal terms, to begin with. If you do not see this breakdown, request one to make the reading of the contract easier and better understood.
- Don’t assume anything, ask for clarity. Don’t think you are too ‘cool’ to ask questions.
- Don’t be afraid to make changes to the ‘Boilerplate’. This is basically used to increase standardization in the structure and language of legal documents… in other words, it is a ‘standard’ language used in most business contracts. An example of this is an ‘Indemnity Clause’ which is basically a clause holding someone harmless for their actions. It might prevent you from taking legal actions against the other signing party so read carefully.
- Get a second opinion, a legal one! Ask for a second read from a lawyer and/or paralegal. If it doesn’t feel right, it might not be right.
Now that I know what to do and I shared it with you, I think we are pretty much set! Do you have ‘Contract Phobia’? Leave a reply
With Love Tal