Why have a Written Contract?

Contracts are an integral part of doing business.  They define important relationships and a  well written contract provides security and protection for the parties.

Often people are reluctant to have a lawyer prepare a written contract for basic business deals because they (understandably) do not want the extra expense.  A verbal contract may be legally binding, but there are many reasons to prefer a written contract prepared by a lawyer and a well written contract may save you quite a bit of expense in the long run.

Some of the advantages of having a written contract are:

  1.  It takes time and careful consideration to write out contractual obligations and responsibilities and impresses on the parties the significance of their commitments to each other and the consequences of not fulfilling those commitments.
  2. A well written contract significantly minimizes the potential for misunderstandings about obligations and responsibilities and provides parties with the opportunity to clearly set out the most important aspects of their business relationship.
  3. If there is a dispute between the parties, a written contract is a clear record of what was agreed to.  Memory is imperfect and having your agreement in writing avoids confrontations over different memories of the contractual terms agreed to.
  4. You may specify how the parties will resolve contractual disputes.  For example, you may agree that any dispute first goes to mediation and then to arbitration rather than going straight to court.
  5. Some contracts must be in writing.  For example, an agreement for the sale of land likely is not enforceable if it is not a written contract.
  6. Often business people repeatedly enter into the same type of contract.  A well written standard contract which may be used with different customers or associates only needs to be prepared by a lawyer once and can be re-used for similar business transactions.

Poorly written contracts are at the centre of many legal disputes.  A poorly written contract uses unclear and ambiguous language which often leads to different interpretations of the same issue.  For a business person, a disagreement about a contract will result in a loss of time and likely money because any time spent dealing with such a disagreement is time taken away from growing your business.

A well written contract should provide you with peace of mind and shows that all parties are paying attention to their commitments and responsibilities.  Our office prepares well written contracts at affordable rates.  Contact us today to see how we may be of assistance.