5 mistakes that can kill your business
Running a business is something many aspire to but few succeed at. There are too many pitfalls in the operations of a business that can lead to failure. It is important to have a lawyer look through your contracts before you sign them to avoid liability. Some of the mistakes you should avoid include;
Not reading the contract
This is one problem that most small business owners face. Sometimes it is tempting to just sign a contract, after all, it looks like the previous one and the one before that. It does not matter if you signed a similar contract with the same entity for the same task last week, read each contract in its entirety before you commit.
Another common mistake in regards to reading the contract is where there were verbal negotiations, so that the contract is treated as a formality because the terms of the negotiation were agreed. It is easy to sign naively trusting that the terms of the contract are exactly as discussed, this is not always true.
Not understanding the contract
Reading the contract is one thing, understanding it is another. There can be some heavy legal terminology as well as jargon in the contract. This is why you should have a business attorney to advise you on the contents of the contract.
The contract can be quite good, with all the necessary clauses but there could be an omission. Consider a contract to supply electronics with a warranty, it is common knowledge that a warranty only covers manufacturer's defects. If this is not included in the contract, the implication will be that the warranty covers all defects. It is important to understand what the contract say as well as what it does not say and make the necessary adjustments before signing.
Wrong execution of the contract
Sometimes the contract can look fine but your actions as a business will make its terms ineffective. Consider a situation where your employee is not authorized to sign a contract and this is stated in the contract. If the employee signs, the contract is invalid. However if you go on to provide to the client the services according to the contract your employee signed, you could be adjudged to have made the contract valid by your actions.
Have a business lawyer
A business lawyer who is experienced in drafting contracts has the ability to sniff out all the potential loopholes in a contract as well as advice you on how to execute the contract without attracting liability.