–Although a handshake remains a gesture of good faith about an agreement or a promise, not formalizing such an agreement in writing may become a huge mistake. Handshake agreements often lend themselves to uncertainty and misunderstanding. What one person may remember the terms of an agreement to be another may remember differently. The San Luis Obispo attorneys at Toews Law Group, Inc. have released a report about the importance of documenting business agreements.
Agreements with business associates including co-owners, employees, suppliers, customers, financial institutions, and property owners, are important to prevent misunderstandings that might result in a ruined relationship, a lawsuit, or interrupted business. A handshake is a polite and graceful way to agree to a business arrangement, however, the details of a verbal agreement are rarely remembered exactly as stated by any party involved.
Both damaged professional relationships and court proceedings are expensive in terms of loss of business, legal expenses, and damaged relationships and community goodwill. It is safer to rely on written agreements and contracts.
When formalizing a contract in writing, there may be specific terminology that might be necessary to define the terms and conditions of the contract. Also, an attorney who is experienced in corporate and business law may provide you with insight into topics and terms that you may not have thought about that may be vital to a smooth business arrangement. The San Luis Obispo attorneys at Toews Law Group, Inc. are available to help provide you with guidance that may help prevent problems that might arise from the lack of a written agreement or a poorly constructed contract. In the end, the best interest of all parties involved is what is important.
Agreements that should be reduced to writing include:
- Partners and co-owners agreements. These agreements should address at a minimum: Who owns what percentage share of the business? What are the financial obligations of each partner? What is the process for selling one’s share of the business? What is the process for bringing in a new partner? What happens upon the death or incapacitation of one partner? What kind of influence does a silent partner have over how the business operates?
- Vendors and suppliers. What are the quality specifications for the merchandise? How long is a purchase agreement in effect? What if the merchandise received is sub-standard? What if deliveries are not received in a timely manner? What are the agreed upon quantities and costs? When is payment due and how does late payment affect future purchases?
- Manufacturing, sales, and delivery contracts. Which products are customers purchasing, in what quantities and costs? How long is the agreement in effect? Who pays delivery charges? When is payment due? What if a shipment is delayed? What circumstances void the sales contract?
- Employee contracts. Should you have one at all? If yes, then certain terms of employment need to be documented in specific ways to avoid future misunderstandings. It is especially important that terms of employment be expressed in a manner that does not violate the employer/employee relationship and mistakenly creates an independent contractor situation. Terms of employment can include stock options, commissions, workplace (employees can work from home under certain circumstances), executive employment contracts, hours and days of work, and any number of other conditions that don’t violate labor laws.
Even when the terms of an agreement or contract are straightforward or appear to be “simple” future misunderstandings can be prevented when an attorney reviews the agreements and contracts before they are signed.
The attorneys at Toews Law Group, Inc., can help with preparing and negotiating contracts and other legal documents such as manufacturing and vendor contracts, independent contractor agreements, sales agreements, partnership agreements, legal correspondence and any other documents and forms needed to conduct and protect a business.
Toews Law Group, Inc. is focused on providing trusted and superior legal services in business, estate and tax planning, trust and probate settlements, and non-profit organizations. The firm’s mission is to provide clients with the best service available at a competitive price in each of the firm’s practice areas.
Toews Law Group
1212 Marsh Street, Suite 3
San Luis Obispo, CA 93401
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