Our attorneys come across a wide variety of contracts on a daily basis, from credit applications to payment plan agreements to promissory notes. If there is one thing they have in common, it is that each contract is unique. That is why it is important that you make sure you read and fully understand any contract that you sign on your own behalf or on behalf of your business. Never sign a contract with terms that you do not understand or understand how those terms will affect you or your business. It is better to figure these things out on the front end, so you do not find yourself in a bad situation down the road.
People will often sign a contract without knowing what it really means, perhaps because it seems like a standard contract or because they think it cannot be negotiated. However, in most cases you can work with the opposing party to tailor the deal to meet your needs. Remember, each deal is different, and the only purpose of a form (or standard boilerplate contract) is to give you a starting point.
An issue we often encounter is that many of our client’s credit applications have not been updated in a decade or were drafted by a client’s corporate office for use in multiple states. The problem is that laws change constantly and vary by state. The terms and conditions of your credit applications need to be in compliance with the law of the state in which you are operating. For example, in North Carolina, there is specific language that must be included on a signed credit application if you want past due accounts to accrue interest at the contract rate post-judgment, or if you want to recover some or all of the attorneys’ fees you spend to collect the account.
By carefully considering each proposed contract that comes across your desk, you are better able to determine the terms of your business deals. Your attorneys can help you understand and negotiate the terms of your contracts to enable you to protect your interests as you seek favorable business associations.