Contracts and Agreements: When Good Business Goes Bad
The importance of a good contract cannot be overstated. As an attorney who regularly deals with good contracts, bad contracts, broken contracts and amicable contracts, I can say that it makes a huge difference for a business or an individual if and when they are faced with legal trouble.
Contract LawWhen a client comes in needing a contract drafted, the goal as a contract attorney is to look ahead to the worst-case scenario and to try to best protect the client in case of a future dispute. The worst-case scenario is typically that the relationship has gone bad and one party sues another. That’s when an ironclad contract can get a client out of litigation as quickly as possible, thereby curbing continuing legal costs.
Or better yet, some contracts may scare the other party into not suing at all.
For example, many clients who have been sued do not have an arbitration clause in their contract. An arbitration clause basically says that if either party has a conflict regarding the contract with the other party, the case first goes to an arbitrator – a neutral middle-person that helps decide the issue out of court. This does a couple things – first it assures that there is a chance to work out the problem outside of court, which cuts legal costs dramatically. Also, if the other party sues anyway (which happens a lot actually) the case can generally be dismissed fairly quickly and sent to arbitration, as per the contract. Again, this cuts down on legal costs.
This is one example of many kinds of clauses that go into a contract that can help alleviate heavy legal costs and time spent defending a case in the future. Many clients who come to me do not have the necessary protections, and it hurts in the long run. Having good contracts is a solid business investment that saves a lot in future costs.