What you Should Know Before Signing a Contract.
Before signing a contract it is important that you know what you are signing. A contract is a legally binding agreement between two or more parties. Contracts exist to confirm an agreement, ensuring that the parties will act and perform as agreed upon. A contract does not have to be in writing, although it is in your best interest if it is.
“What should I do before I sign a contract?”
Before signing a contract, read it thoroughly. Make sure that the contract accurately reflects what the parties agreed to. If the parties agree to something and it is not written out in the contract, it is not guaranteed. The contract can only guarantee what is included within the “four corners” of the contract, meaning, anything not written in, is not guaranteed.
Reading the contract thoroughly can ensure that there is no misinformation or terms that were not agreed upon. It is important that you understand what it is that you are agreeing to. What are the terms of the contract? What are your duties under the contract? What are the other party’s duties under the contract? What are the terms of default under the contract? When does the contract terminate? Be sure to look for the answers to these questions while examining the contract.
Always get a copy of the contract. Even better yet, if you are able to keep the original, keep it. If a breach of the agreement occurs it is important to have a copy of the contract to protect yourself. A breach in the contract can end up costing you whether it is a breach of your own or another party.
“How do I sign a contract?”
When signing a contract it is important to use caution when signing. The parties that sign the contract become the parties to the contract. For example, if you are signing a contract as a member of your company you should sign as a member; i.e. “John Doe, Member of ABC, LLC.” Signing as a member keeps you safe when you are not an actual party to the contract but rather acting on behalf of a company. If you are unsure of how you should be signing contracts you enter into for your company, contact an attorney to discuss.
“When do I get my lawyer involved?”
If the contract includes something other than what was agreed upon or you don’t fully understand it, talk to a lawyer. A lawyer can review the contract for you to ensure that the contract follows the applicable laws and acts in your best interest. While a lawyer can also help you on the back end if a contract ends up acting acts against you, it may be in your best interest to speak with an attorney prior to signing. If you have questions or want an attorney to review a contract for you, contact our offices.