By Angela M. Ward, Attorney
Lancaster County business is most efficient with sound contracts. Whether you are buying, selling, renting, merging, leasing, hiring, starting a new job, or starting a new partnership, a sound contract is at the heart of every important business transaction.
While many Lancaster County business agreements are sealed with an oral agreement and a handshake, it is much safer for all parties if they start with a more easily-enforceable written contract. A formal, written contract is an effective way to state the expectations of both parties, to clarify costs and deliverables, and to map out resolution strategies.
Sound contracts protect you and your business. While it’s tempting to trust in the good nature of your colleagues, employees, partners, or vendors, understanding the deal actually reviewing every part of a contract and obtaining advice on unclear terms is the only way to ensure mutually-understood performance terms and the consequences when those terms are not met. With sound business contracts and advice, both parties are protected from confusion, frustration, disagreement, and liability for breach of duties.
A Business Attorney can Help You Avoid Confusion and Problematic Clauses
While some businesses write their own contracts or get forms from online sources, it’s always a good idea to have a qualified business attorney, with experience in contract law, review contracts before signing them or before asking others to sign them. A qualified attorney can identify problematic causes that may be unclear, unusual, or that will not hold up to legal scrutiny.
The recent lawsuit from Penn State against former Coach Shoop highlights the issues of contracts with unusual or exceptional clauses. Penn State sued for breach of contract because Coach Shoop left before the term of his contract was completed. Shoop’s lawyers charged the terms were so unusual as to be unenforceable and won a countersuit. If the contract had been written more clearly, and with a greater consideration for conventional contract terms, the contract may have been more defensible when contested.
A Contract Lawyer Helps Identify Missing or Conflicting Elements
While the heart of an agreement is often straightforward – I do this, and you do that – the power of a contract often lies in the language around contingencies and legal protections. For example, if you create or sign a contract without a clearly worded dispute clause, you may find yourself in an expensive lawsuit. Well-written dispute clauses will clarify the dispute resolution process, and avoid unfavorable legal situations down the road.
Non-explicit, default and dispute resolution clauses could cost a business thousands in avoidable legal fees. In 2017 a Finnish company and a Pennsylvania biotech company found that their contracts had conflicting arbitration clauses. When a patent dispute arose, courts ruled that the PA business had to comply with the Finnish company’s preferred arbitration process, and dispute the patent before the International Chamber of Commerce. This unfamiliar, and expensive, legal venue resulted in enormous legal fees for the Pennsylvania company.
Have a Lawyer Look at Your Contracts
As a business owner or senior executive, you will be asked to sign contracts on a regular basis. You will sign contracts for everyday items like phone services and internet, but also be asked to sign vendor agreements, employment agreements, non-compete agreements, loan documents, leases etc.. While many business owners sign contracts quickly and automatically, reviewing contracts in detail is important. By using a lawyer for contract review, you’ll ensure you fully understand any unusual clauses, hidden terms that are buried in legal language, and consequences for an action you may take, such as terminating an employee, a service provider, or vendor.
In the world of contracts, understanding details is essential. Going and Plank can review contracts before you sign them, and help you identify unusual or potentially problematic language. It’s prudent to use the services of an experienced business attorney to review employment contracts, leasing or real estate contracts, home improvement contracts, service contracts, vendor agreements, leasing and purchasing agreements.