Importance of contract drafting for your business

A well-written contract is the heart of any successful business and serves as the foundation of any transaction done by businesses. A contract is a legal proof of any transaction, agreement or trade done between two businesses. But more often than not, contract drafting is undermined by businesses and this leads to major complications in future.

Business cannot only rely on shake hands and vocal commitments, there has to be a written, law abiding proof of the agreement.  A contract lays the foundation for anything you or your business might do, and protect your actions by law.

Various types of contracts:

Sales of service/ Goods Contract

Terms and condition of use

Lease contract

Agency agreements

Distribution and Franchise Agreements

Partnership agreement

Intellectual property contract

Employment contract

And many more, any time you or your business interact with another business or individual- there is a contract for it. This explains the dire importance a well-drafted contract.

Here are our few tips to consider before contract drafting.

1.      Never do anything without a contract or an Agreement:   Businesses don’t run on trust. So trusting your partner over a shaking hand or over a verbal agreement can lead to disastrous results in future.  However old you relations might be, it is always worth taking an effort to draft a legal contract- so you are protected in case things go wrong.

2.      Seek expert help if necessary: Drafting a contract is an art, as well drafted – well-organized contract can help you negotiate over important trade aspects. It also makes sense to add a non-compete or other similar clauses to protect and secure your business. Contracts also allow you to discuss future of your partnership and what should happen if someone violates the contract.

3.      Take your time to read through the entire contract: It is always a good idea to read the whole contract before you sign it. As once you sign the contract, you cannot break free from it without legal consequences. That is why it is recommended that you read the entirety of contract, word by word and then sign.

4.      Perfect your language: While drafting a contract you need to be very precise and accurate about your goals and describe them in plain, simple to understand English. Each sentence should be less than 25 words and must be easy to understand. Avoid long, confusing and complex sentences. Remove redundancies and only talk about essential points. Avoid passive voice and minimise the use of prepositions. Avoid non-professional language. Draft the contract as if an 8th-grade student was going to read it. Keep the writing simple, clean and precise. Avoid jargon and confusions.

5.      Organise your Contract: When writing a contract, think of you creating a book and each clause you add represents a chapter in that book. Organise those clauses in such a way that your contract flows smoothly and talks about each point only once. Make sure you define terms used in the beginning of every section and feel free to reference to it later in the contract when required.

Choose your words very carefully, as a small mistake might cost millions in future.

We at pnjlegal.com offer professional contract drafting services.

We, "PNJ Legal Consultants" are one of the well known organizations engaged in providing Consultancy Services keeping in mind the Client Service Mentality.

We have a team of highly qualified professionals and time to time training is provided by us as per the requirements. Our team members deliver excellent performance in providing these services and our clients can avail the services at affordable prices.

Our sophisticated team has complete knowledge of various exercises and technicalities that are used in our services. Our services includes Strategy Consulting, GST Consulting, Asset Management, Feasibility Study, International Arbitration, Due Dilligence, Franchisee Consulting, Financial Audits, Operational Audits, Tax Heaven Registrations, Shareholder Agreements, Start up Consulting, IP Consulting, Taxation Services, Accounting system design and Mergers Acquisitions.

Contact at parascs@gmail.com or refer website www.pnjlegal.com