Why Contracts?

Business Contracts Entrepreneur Law Legal Stacie Townsend

Stacie Townsend - Sports, Business, Family - Student-Athlete, Entrepreneur-Attorney-Author-Coach-Athlete

Contracts are generally complicated and, sometimes, intimidating. As a result, some business people refuse to sign them, opting instead for a “handshake” deal. With that said, there are some reasons that a written contract, no matter how simple or sophisticated, is beneficial to a deal:

  1. Negotiating a written contract forces you and the other party to discuss the terms (e.g. responsibilities, timing, payment, etc.), and helps you really think through all the ins and outs of a deal. Many terms may not have otherwise been discussed or flushed out if you did not have a written contract.
  2. Having a written contract helps when our memories fail. This is especially true if a business relationship will extend over a long period of time. It can be difficult to remember the exact terms of the deal, so having a written contract can certainly help.
  3. Having a written contract gives you a “stick” to protect yourself against the bad apples in the world that cannot be trusted to keep to their word on a handshake deal. However, please be aware that no matter how strong or well-written a contract is, a broken deal can, and probably will on some level, disrupt your business. So, be sure to do your due diligence at the start of a relationship (e.g. research online, ask for references, look at social media, etc.).

As mentioned above, contracts (although, at times, necessary and beneficial) can be intimidating. To breakdown this intimidation factor, we will, from time to time, both in this blog and on www.StacieTownsend.com, explain some common contracts and contract provisions that entrepreneurs may come across on a day-to-day basis. Stay tuned!

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