How To Prevent Breach of Contract

breach of contract papers with pen and gavel

Businesses depend upon contracts every day to buy and sell goods and services.

It is essential that you, as a business owner, be able to rely upon your partners, customers, consultants, contractors, employees, and a host of others to keep their word when you enter into agreements with them. A broken contract can lead to loss of profit, income, and tedious litigation.

A breach of contract can be intentional and cannot be avoided easily; others are based upon poor drafting or misunderstanding between the parties.

You can avoid these breaches by taking simple precautions to ensure that you and the other party to the agreement are on the same wavelength and understand one another perfectly.

Be certain that the contract language is clear.

Contracts often have vague or imprecise language, and parties to a contract often draft unclear terms. Sometimes, parties will use archaic language found in a sample contract or template to believe it “sounds more legal that way.”

It is nearly always a mistake. If a phrase is open to two or more different interpretations, a client or customer might easily reach a different understanding from your intent. It is also quite possible for words to be twisted to gain the advantage in a deal that has gone badly for one party.

Often, the most obvious terms are the ones most in need of a definition. If your contract specifies delivery “by the close of business,” you should specify a time and time zone instead. It is always the close of business time somewhere.

Create clear fulfillment goals and expectations.

In addition to clarity of language, you should strive for clarity of responsibility, especially for the execution and delivery of the final product. The work of drafting your goals has to be a shared task. If you set a delivery date, you must ensure that your contractor can feasibly complete the task by that date.

Work with serious professionals and reputable firms.

Any contract is an expression of trust between the parties. It would help if you made certain that the firms and individuals you do business with will honestly go about their obligations in a business-like fashion and in a way that is worthy of your trust.

Before entering into any agreement, you should do some due diligence. That may involve seeking references or recommendations from other clients or customers. It may also involve a credit check or investigation of professional associations and affiliations.

Understanding the other party’s record can go a long way toward preventing problems.

Hire legal advice to ensure contracts are legal

All contract terms must comply with the law, or it will invalidate the agreement. Not only must your agreement comply with the basic tenets of contract law, but it must also comply with the relevant local, state, and Federal laws related to your business.

Many business owners are tempted to save money by relying upon contract templates found on the internet- this can often lead to trouble.

Suppose you live or do business in the Philadelphia area and are perplexed by the legal requirements of contract drafting. In that case, you may wish to consult a business attorney in Bucks County for advice in contract preparation and interpretation.

Consult the Olen Law Office Today!

Since 1978, Elliot Mark Olen has practiced as a business attorney in Bucks County, Pennsylvania. He has represented many local businesses and assisted clients from around the United States and the world of business in Pennsylvania. His clients receive personal attention in all of their legal work from Mr. Olen. If you are in the Philadelphia area or need a firm specializing in Bucks County business law — contact the Olen Law Office today for a consultation.