Espenschied, L.E. (2015). Contract Drafting – Powerful Prose in Transactional Practice. Chicago, IL: American Bar Association.
Contracts are important when operating a small business. As a savvy businessperson, you probably already know better than to sign any contract before your lawyer reviews it, right? Contracts are prevalent in all types of businesses, but Utah small businesses rarely have an attorney review a contract before signing it.
Of all lawsuits with small businesses, breach of contract equals 30% of cases filed. That’s almost 1/3 of all lawsuits where small businesses are sued or they sue somebody because of an issue with a contract.
What is a contract? A contract is a voluntary promise or group of promises that the law will enforce. When we think of a contract, most of us consider the standard written document with all appropriate signatures. However, contracts include a variety of agreements beyond the standard like: policies and procedures, employee handbooks, letters, and even oral agreements may be determined to be a contract.
Breach of contract happens because most contracts contain convoluted language handed down from one transaction to the next through untold generations of lawyers. Wordy contracts can be a minefield for ambiguity and incomprehensible provisions. Litigation is time consuming and expensive, and the client’s business relationships may be irretrievably damaged if litigation is necessary to resolve a dispute over the meaning of ambiguous terms.
Good legal drafting is both an art and a science, but there are certain principles that lead to greater clarity when writing in Plain English. Plain English cannot completely eliminate the risk of misinterpretations, but it will significantly reduce the risk. A good business attorney can pinpoint typical problem clauses in contracts that may save you money down the road. Small businesses may take action too quickly under an executed contract like withholding payment. However, the contract may not allow termination of the agreement without giving the other party a chance to cure the breach.
Dana Ball prepares contracts using Plain English to limit your liability down the road. At a pre-agreed price, Dana Ball makes it affordable for small businesses to get the advice needed before signing a contract.
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