I am not an attorney but I have dealt with business contracts quite a bit. Often though, one party or the other does not understand or realize they have entered a contract with another party, mostly because the contract is verbal. Verbal contracts are usually called deals and both parties are expected to live up to the agreement.
We have contracts so both parties know what their responsibilities are. Often one side cannot meet their obligations under the contract and we call that a breach. What should the other party do in this case?
They could try to work out a contract separation agreement. Perhaps the jilted party can agree to a monetary settlement that works for them. Often the party that breached the contract cannot settle in this way because they had a financial setback that caused them to breach in the first place.
They could take the issue to court. Perhaps a judge can create some sort of settlement that works for both parties.
They could allow the other party out of the contract. Sometimes there is no real damage involved, but this depends on how much the parties have invested into the contract in terms of time and or money. If this is something that happened just after a contract was entered into, perhaps just going separate ways is a good idea.
Remember that a deal that both parties agree to is a contract, even before the signature is on the page. Business people know this and assume that they are dealing with others in good faith. When this is not the case, it can lead to tremendous losses. How can you be sure that a contract is actually a contract?
Get it in writing. The easiest way to litigate a contract is if the terms are spelled out, agreed to, and signed on the dotted line. Make sure the wording is clear so that both parties can understand.
Spell out the consequences. If either party breaches on the contract, what are the consequences? Spell it out in the contract so that both parties understand.
When you decide not to use the nuclear option when the other party does not live up to the contract, what are the consequences to your business? That is the question you must answer if you decide to walk away.
Have you ever entered into a contract where the other party breached it?
About The Author
Brian Satterlee ran the successful multi-level marketing distributorship Satterlee Marketing from 1997 through 2002. He created an ecommerce site to sell a dietary supplement and recruit new sales people. When the MLM company changed to a retail marketing plan, Brian decided not to start again but to devote time to his family.
Brian now writes and works as a Business Analyst. He received his MBA from the University of Phoenix in 2009.
Visit http://www.splashplan.net for more free small business tips from Brian Satterlee.
By Brian Satterlee
Article Source: A Deal Is A Contract
We have contracts so both parties know what their responsibilities are. Often one side cannot meet their obligations under the contract and we call that a breach. What should the other party do in this case?
They could try to work out a contract separation agreement. Perhaps the jilted party can agree to a monetary settlement that works for them. Often the party that breached the contract cannot settle in this way because they had a financial setback that caused them to breach in the first place.
They could take the issue to court. Perhaps a judge can create some sort of settlement that works for both parties.
They could allow the other party out of the contract. Sometimes there is no real damage involved, but this depends on how much the parties have invested into the contract in terms of time and or money. If this is something that happened just after a contract was entered into, perhaps just going separate ways is a good idea.
Remember that a deal that both parties agree to is a contract, even before the signature is on the page. Business people know this and assume that they are dealing with others in good faith. When this is not the case, it can lead to tremendous losses. How can you be sure that a contract is actually a contract?
Get it in writing. The easiest way to litigate a contract is if the terms are spelled out, agreed to, and signed on the dotted line. Make sure the wording is clear so that both parties can understand.
Spell out the consequences. If either party breaches on the contract, what are the consequences? Spell it out in the contract so that both parties understand.
When you decide not to use the nuclear option when the other party does not live up to the contract, what are the consequences to your business? That is the question you must answer if you decide to walk away.
Have you ever entered into a contract where the other party breached it?
About The Author
Brian Satterlee ran the successful multi-level marketing distributorship Satterlee Marketing from 1997 through 2002. He created an ecommerce site to sell a dietary supplement and recruit new sales people. When the MLM company changed to a retail marketing plan, Brian decided not to start again but to devote time to his family.
Brian now writes and works as a Business Analyst. He received his MBA from the University of Phoenix in 2009.
Visit http://www.splashplan.net for more free small business tips from Brian Satterlee.
By Brian Satterlee
Article Source: A Deal Is A Contract
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