Contracts have many important components but over my years of practice, there is one main reason why people end up in court. The reason is…
… non-performance…
that was obvious, right?
This is a classic ‘breach of contract’ claim. This means that one party in the contract did not fulfill their obligations. So what can you do to decrease the chance of having a ‘breach of contract’ scenario? Here are three tips to help preempt being in a ‘breach of contract’ dispute:
- Put everything in writing. This might be another ‘no-brainer’ but surprisingly, many people still do not put their agreements in writing. There are two reasons for this: 1) the people involved are friends or family and 2) the relationship is not obviously one that relates to a contract. When it comes to friends and family, we tend to let our guards down and be more trusting. In addition, we don’t like to ask for contracts from friends and family because they may be offended. As for the second reason, people often ‘agree’ to things when speaking and do not realize they entered into a contract. As a rule, regardless of who you are dealing with, if there is money or services involved, it’s best to put it in writing, even if on a napkin.
- Don’t do business with shady people. I always say: you can not contract yourself out of a bad relationship. Contracts are great for creating legal rights or to make everyone’s rights and responsibilities clear, but they do not automatically protect you from fraudsters. If someone is not playing fair, a contract is not going to help because that means you have to drag them to court when it was clear up front that the other party is likely to break the rules. If you find yourself in that situation, it may be best to just walk away from the relationship at the outset.
- Keep It Simple. Contract templates are easy to find online. Frankly, most of them are poorly written. Over the years, it seems as though lawyers thought that the more wordy and complicated a contract’s language is, the more protection those involved have. This could not be farther from the truth. It’s best to keep contracts simple and easy to understand. Otherwise, you could end up court because the terms could be interpreted in multiple ways or do not make sense at all.