Creating Secure Business Contracts: A Comprehensive Guide for Startups
Updated: May 18
Launching a new business encompasses multiple aspects, from acquiring clients to stocking the necessary inventory and equipment. Amidst these critical tasks, the potential to overlook the proper drafting of contracts or merely rely on verbal agreements is significant.
In this article, Arida Lawyers, a prominent law firm in Parramatta, will guide you through some valuable tips to ensure the development of a valid, secure and enforceable contract.
1. Customise to your Industry:
Avoid resorting to generic contracts as they may leave room for interpretation or fail to accurately represent your specific business operations. Strive to maintain clarity and concision in your terms and conditions to prevent potential misinterpretations, which could consequently enhance your legal standing in any disputes. Remember, clear language not only enhances readability but also requires a sound understanding of the legal frameworks surrounding your specific industry.
2. Scrutinise your Commitments
Reflect thoroughly on the promises your contract contains and assess whether you can fulfil these commitments realistically. Maintain clear, precise descriptions of what your service entails to minimise ambiguity. Ensure your indemnity clause is error-free and consider your break-free clause carefully, specifying the circumstances that would allow either party to rescind the agreement.
3. Understand the Power Dynamics:
Sometimes, the hiring entity or contracting party may prefer to provide the contract. While this may seem convenient, it is imperative to scrutinise their contract diligently. Recognising the intricacies and potential implications of signing such a contract can be challenging. A legal services team can provide clarity, helping you make an informed decision.
4. Streamline Payment and Address GST:
Ensure the contract clearly defines payment methods and deadlines to avoid any future disputes. Remove any potential obstacles that could justify late payments. Address whether listed prices include or exclude GST and define acceptable payment structures (e.g., full upfront payment, partial upfront payment with the remainder upon completion, or other arrangements).
5. Safeguard your Intellectual Property:
If your agreement involves the creation or development of any original work, the contract must clearly state the ownership of intellectual property. Although you may have inherent rights, incorporating appropriate clauses in writing further fortifies your claim.
Constructing a contract that safeguards your business is a complex endeavour. It may be advantageous to collaborate with a lawyer to establish a reliable contract that defends your interests.
Arida Lawyers is available to assist in the development or review of your contracts. Contact us for a free consultation at 1300 146 390 or firstname.lastname@example.org. Remember, securing your contract is akin to securing your business future.
This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.
Liability limited by a scheme approved under Professional Standards Legislation.