Tag Archives: Business Contracts

Legal Issues to Consider for Business Contract

Business Law firmIt is important for a person to know the legal implication of every contract he is entering to. A person who doesn’t have enough knowledge about the business contract he’s about to signed shall lead to a very serious problem that may caused the signee to suffer damages. The point here is to review every single line of a business contract you are about to signed and make sure you have read even the littlest detail indicated in the contract. You may start by checking the privacy section of the contract. Often when entering a business contract, the other party will gain access and insight into your business practices and possible trade secrets. If you do not want the other party sharing this information, you should include a clause that binds the other party from disclosing your business information or information included in the contract to other parties.

Second factor you need to consider is the laws of the state where the contact is celebrated.  Contracts can stipulate which state’s laws will govern in the event there’s a dispute. It must be patterned with the laws of the states where the businesses are located. Let’s say that the other party is located in another state, you should indicate that in the contract, a clause which will mentioned the state laws that will govern on the contract. Failure to do so shall result to a dispute that which will cost a lot of money.

Next thing to know is the party to the contract. Be sure that the business you are contracting with is registered to do business in the state in which you operate your business. Should there be a problem later on, it will be much easier to institute a lawsuit as the states maintain addresses for service of process on registered corporations. In addition, if the business is not properly registered in the state, there could be legal issues with your contract. The business should also be licensed in the specific type of business it conducts, if this is required.

Lastly, a business contract must include a mediation and arbitration clause. This is to protect your business in case of a dispute. This will indicate a provision that will require parties to enter mediation or arbitration, or both. This is to avoid spending money for the cause of court process. These settlement, mediation and arbitration, is an outside court resolution for the benefit and advantage of both parties. Both parties must abide by the decision that will come out after the settlement.

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