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In making a business contract, there are many things that must be considered. Because if you don't, you will be easily deceived by irresponsible parties. According to negotiation expert and author of Think Like A Negotiator, Eldonna Lewis Fernandez, many business people don't fully read or understand business contracts before they sign them.
To help you understand the business contract you are about to sign, here are five things to consider.
1. Find Information About Business Partners
According to Eldonna, before agreeing to a contract, you must dig up as much information as possible about your business partner. How was the previous performance? What's his reputation like?
How to? You can ask the help of the Google search engine to start researching your business partners. In addition, you can also collect information from clients or colleagues who have worked with your business partners.
2. Don't Start a Business Without a Contract
Do not start work on anything until the contract is agreed upon by both parties and signed. Contracts in business essentially contain two things, namely obligations and rights, as well as monetary compensation for certain jobs and goods/services that are exchanged.
While business contracts generally contain:
1. Title of the contract
2. A comparison containing some information about the parties or at whose request the agreement was made.
3. A description of the intent of the parties to cooperate and sign a contract known as the “premise”.
4. The contents of the contract in the form of the terms and conditions of the agreement agreed by all parties.
5. Cover
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A contract is a sign of legal evidence in which all parties agree on certain matters that are binding. Make sure you keep a neat copy of the signed contract.
3. Don't Hesitate to Ask Business Partners
Sometimes, there are things that are not stated in the contract and cause problems later on. Therefore, do not hesitate to ask questions that are not clear. Because details that are not included in the contract can later create additional costs when the business is already running.
Things you might ask your business partners include:
1. When is the payment deadline?
2. What is the procedure for contract cancellation?
3. Who is responsible for the costs incurred if a problem occurs?
4. Include Clear Guidelines
One of the mistakes and problems that are commonly experienced by business people when making contracts is not including clear guidelines. To prevent you and your business partner from doing extra work or excessive contract revisions, pay attention to the procedures that must be carried out along with the guidelines.
5. Understand Contract Language and Seek Advice
Contract language for certain areas of business can be very specific, so you should really understand the language and terms used. For example, the information confidentiality clause in the cooperation agreement between the company and a computer maintenance vendor. The extent to which confidentiality of information is an obligation and what are the legal implications?
Do not hesitate to seek advice or expert opinion if there is anything you do not understand in the contract. Therefore, it would be better if you do a contract review. Because the information obtained is obtained from a second person or a third person, some important elements you can't just miss.