What Business Lawyers Look For When Reviewing Contracts
9 Things Expert Arizona Business Attorneys Always Look For During a Contract Review
Contracts will be at the heart of almost all your business interactions. You will need contracts for your sales, purchases, business partnerships, employment agreements, and much more. It is important that you work with an experienced Chandler business attorney to create or review these contracts to ensure that they protect your rights and minimize your liability should there ever be a dispute.
Your business attorney in Chandler will approach each contract with a unique point of view, based on the goals of the contract. However, here are a few things that your attorney will always look for when reviewing a contract:
Any contract needs to begin by clearly defining who the parties are who are signing on to the contract. Many contracts make the mistake of using a person’s name for one of the parties instead of the company. For example, it might state that the contract is between the vendor and Joe Smith, rather than between the vendor and Joe Smith’s company. Failing to properly identify the parties signing the contract can create legal complications later if there are any disputes. Getting it right at the beginning can ensure that you don’t lose the opportunity to get remedy later because of a technicality.
The Rights and Duties
The contract must clearly state the rights and the duties of each of the parties. This section needs to be as specific as possible. The information contained here will be the primary basis for legal arguments that need to be made to seek redress for breaches. For example, if you want to sue a vendor for failing to deliver goods, you will have to look at the contract and point out what goods had to be delivered, in what quantities, for what price, and by what time, among other things. If these specifics are not included in the contract, the dispute may be dismissed, and you may lose out on damages. Your business attorney in Chandler will ensure that the contract contains all the necessary specifics to protect your interests.
Remedies for Breach
The contract should clearly state what remedies there will be if the contract is breached by either party. It should include the type of procedures that can be taken, such as mediation or arbitration, and it may even outline the amount of damages that can be sought. Your business attorney will counsel you on what guidelines should be included here to protect your ability to get a remedy for any damages you suffer from a breach of contract–or minimize possible damages if something goes wrong with the contract.
Process for Handling Disputes
Your contract should outline a process for handling any disputes that may arise over the contract. That can include arbitration, mediation, or litigation. The contract may include rules for when each of these resolution options may be used. Your Chandler business lawyer will help you understand the pros and cons of each process and put measures in the contract that will ensure the best outcome for you in case of a dispute.
Clause for Legal Fees
The rule in the U.S. has traditionally been that the parties would pay their own legal fees in teh event of litigating any disputes arising from the contract. However, in Arizona a prevailing party in a disputed action may be able to obtain its legal fees from the other party. And some contracts can include a clause that says that the losing party will have to pay any legal fees if legal action is required because of a dispute.
Clause on Merger and Integration
In some contract disputes, a party may attempt to include information that was shared outside the contract, such as a verbal agreement to change the cost of goods or the delivery schedule. In an appropriate agreement, merger clauses and integration clauses can prohibit such outside information being considered unless it was shared in writing and signed by both parties. This would ensure that all information is clear and objective.
Rules against Assigning the Contract
Say a vendor is unable to complete an agreement as outlined. That vendor might want to assign the duty to another vendor or subcontractor. You can ensure that this is specifically permitted, or prohibited, by including a clause in your contract to that effect. Clarifying this rule will improve your chances of success if you have to litigate a dispute later.
Rules for Consequential Damages
Consequential damages can be things you suffered as a result of the breach, in addition to the direct damages. For example, if a vendor fails to deliver certain goods on time, you may have lost the immediate sales from those items. However, you might also be able to show that you lost long-term contracts related to that delay, and those would be consequential damages. Including a clause on consequential damages can help you to get full remedy in case of any breach.
When and How the Contract Will Terminate
A contract will not be in place in perpetuity. It is important that specifics are included on when the contract will terminate and how, such as when goods are delivered, when an employee quits, or when a sale is completed. Your attorney will guide you on what needs to be included to protect your interests.
Having all of these specifics in place will help to protect your interests and strengthen any case you may have if the contract is breached. Your business attorney serving Chandler will ensure that these and any other items are included in the contract to reduce your liability and strengthen your options for remedy in the future.
The business lawyers at Denton Peterson Dunn can review or prepare any contracts for your business to protect your rights and reduce your liability. Our attorneys handle all kinds of contracts for all kinds of businesses. We also represent businesses in contract disputes, whether through arbitration, mediation, or litigation. We represent clients throughout the Phoenix area. Call Denton Peterson Dunn today to talk with a business lawyer about your needs.