Why Even A Simple Contract Can Save Your Bacon
Below is a MRR and PLR article in category Business -> subcategory Entrepreneurs.
Why Even a Simple Contract Can Be a Lifesaver
Summary
Business owners often ask, "Do I really need a written contract?" The answer is a resounding "YES!" A written contract is like insurance for your business deals?"but even better.
The Importance of Contracts
A contract is a legally enforceable agreement between two or more parties. It outlines the promises made by each party, legally referred to as "consideration." These promises define the relationship and the agreed-upon actions. If someone fails to fulfill their promises, they've "breached" the contract and can be held responsible for damages. This usually means compensating the other party for what they would have received if the breach hadn't occurred.
Oral vs. Written Contracts
Imagine you're at a party and meet someone interested in your product. You agree to supply 1,000 units at a discounted price. You've formed an "oral contract," where he promises to order and you promise to deliver at a discount. But is it reliable? Often, no. In many states, oral contracts aren't enforceable if they're valued over $500, due to the difficulty in proving their terms. This is known as the "Statute of Frauds."
Consider a situation where you intend to offer a 10% discount, but he expects 20%. If unresolved, this disagreement could lead to a court battle, hinging on whose story the judge or jury believes. Do you want to risk it?
A simple written contract specifies your agreed 10% discount. If it goes to court, his signature and the clause can be presented, ensuring you win. The contract should also include a clause for reimbursement of attorney fees and costs, ensuring he covers your legal expenses if you prevail.
Additional Benefits
A written contract also aids in due diligence. In negotiating specific terms, if the other party hesitates, it might indicate they can't meet their obligations. This could alert you before committing your resources, saving potential headaches.
Conclusion
In conclusion, even a simple written contract can be a crucial tool for your business. Much like car insurance, you'll be grateful to have it if a deal falls through.
You can find the original non-AI version of this article here: Why Even A Simple Contract Can Save Your Bacon.
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