Whether it’s buying a home, applying for credit or accepting a new job, people and businesses are drafting and executing contracts every day. Often, these contracts are not understood by the individuals signing them and perhaps not even read. Even lawyers such as this one have signed (or clicked) without reviewing all of the fine print. Nobody likes reading through all that legalese, but when we enter into agreements that we do not understand, we are taking an unnecessary risk and potentially causing problems for ourselves in the future. On the flip side, the drafter of a contract can run into problems if the language is not carefully crafted in light of the purpose of the contract and the applicable law.
Not surprisingly, there is rarely a shortage of contract disputes. When parties enter into contracts with different ideas of what the agreement means, or when the contract fails to address certain matters, a dispute is inevitable. As with most legal issues, many of these disputes could be avoided with proper planning and drafting prior to the execution of the contract and a consistent understanding of the terms among the parties. There are several basic, yet important, things to consider when entering into a contract. Among them:
- Clarity: Is the language of the contract clear, understandable and grammatically correct? Does it make sense?
- Completeness: Are all material terms included? Does the contract address all issues that it should?
- Review: Did an attorney draft or review the contract? Whose attorney? Do you understand the contract?
- Execution: Is the contract signed by the right person or business entity? Did that person have authority/capacity to sign? Is there a witness?
Entering into an employment contract, drafting a credit application or having a customer execute a promissory note can seem like a simple process and that is often the case. However, there are potentially harmful consequences that may arise in various situations. So exercise caution, take time to review and ask for help where needed.
If you need assistance with the drafting or review of a contract, the attorneys at Vann & Sheridan, LLP would be pleased to help.