Why Legal Review of Business Contracts is Essential

Contracts are a part of life. In professional or personal life, everyone signs a contract at one time or another. Renters sign a lease contract; employees sign an employment contract; homeowners sign mortgages, which is another term for a contract. In most cases, a piece of paper is presented, a pen is offered, and the individual signs on the dotted line. Unless something goes wrong, the document is filed away. Only after a problem arises is the paper pulled out of a file, and the individual discovers a lack of the proper protection.

Experience Required

In most aspects of life, individuals seek the individual with experience to provide the proper service or care. For example, an ill person does not go to the plumber to get the necessary treatment. A water leak does not result in a call to the electrician. For the same reason, businesspersons and individuals need the experience of a qualified lawyer to establish contracts that take into consideration all potential problems and the consequences of actions related to legal issues like:

  • Employee contracts
  • Prenuptials
  • Lease agreements
  • Buyer/seller contracts
  • Business partnerships
  • And more

An Ounce of Prevention

A contract is essentially for the protection of both parties involved in the transaction. For example, an employee contract protects the employer against legal actions, when disciplinary measures are necessary. When the employee signs the contract, he/she knows that the employer will have “just cause” for dismissal, demotion, or other disciplinary actions, based upon performance or lack thereof.

Likewise, a contract with a construction worker explains what services are to be expected and the payment to be received when the job is successfully completed. However, the contract will also address penalties that will be assessed, if the project is not done in a timely manner, or protect the buyer, if the job is not done correctly, as specified in the document.

Another excellent example of why contracts are essential is the lease agreement. The document is explicit regarding the rent, responsibility of the renter-while in possession of the property, and the responsibilities of the landlord. A qualified lawyer makes certain all of the possible contingencies are covered, if the renter needs to be evicted or charged with necessary repairs, or the renter is evicted without “just cause”. All contracts should protect the interests of both parties, because each knows exactly what to expect of the other.

Ignorance is not Bliss

Never assume a contract is in the best interests of both parties. Many people blindly sign because they want to rent an apartment, get a job, buy a house, etc. Unfortunately, if something goes wrong, the consequences are devastating. Read a contract entirely. Take a magnifying glass for the fine print. If a question arises, do not sign until you clearly understand all of the applicable rights, obligations, and penalties for each party. If necessary, take the contract to a qualified attorney for review before signing. When it comes to contracts, ignorance is not bliss.

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