While I’m sure you have worked with your fair of contracts, you may not be familiar with some of the major mistakes companies make when signing them. Mistakes that cost money and time, and which can be the cause of significant stress.
What’s so frustrating is that with just a little knowledge, most contract mistakes can be easily prevented.
Here are the top 3 mistakes companies make when signing contracts and how to avoid making them yourself:
Mistake #1 – Companies Fail to Think through the Payment Provision: Negotiate the payment provision so that a $10,000 check can’t be held up over a $10 dispute.
Mistake #2 – Companies Fail to Limit their Risk: Pare down the indemnification provision to apply only to actual damages caused by your company.
Mistake #3 – Companies Fail to Identify Who will Pay Them: Clearly identify the person or company responsible for payment. There is a big difference between John Smith and John Smith Limited, LLC. Ask yourself: From whom will I actually collect?
Keeping the above-mentioned tips in mind the next time you sign a contract may prove invaluable in helping you avoid making unfortunate and costly mistakes.
Eliot Wagonheim shares business insights that help companies stay on course. Get our latest blog posts sent right to your inbox. Subscribe using the sign up form to the left of this post.