The days of a handshake serving as the basis for two folks doing business has pretty much died. While certain contracts must be in writing (the sale/transfer of real estate), it is sound practices to get any agreements with key vendors and customers, in writing. Such documents can provide invaluable when creating a business plan – how much are you going to have coming in from a revenue standpoint, and what is that going to cost you – but a well drafted contract can also provide the framework for when things go south with that customer or vendor.
You need an agreement that addresses the realities of your situation, not just esoteric legal ideas. While lawyers often look for certain clauses – forum selection (meaning what law will apply), venue (where any lawsuit or arbitration needs to be filed), arbitration or alternative dispute resolution (giving up your right to go to court or a jury), or liquidated damages (a pre-set amount that you can recover if the contract is breached), such clauses sometimes ignore, or fail to address the everyday realities of business. From a business perspective, it is often times more important to discuss how and when payment will occur, and whether or not certain items that are either trade secrets or intellectual property, are handled, then whether or not an equitable alternative dispute resolution clause (arbitration or mediation) exists. While we read about, or hear about, business deals going bad; an overwhelming number of business deals are completed, or followed on a daily basis.
Too often, lawyers forget that the idea behind drafting a contract is to help the parties succeed, as opposed to being the stumbling block that prevents a deal. My experience working with both local and multinational companies allows me to understand the important issues to your business, and helps avoid the “the lawyers killed the deal” syndrome. As such, it is important for anyone drafting a contract on your behalf to understand the following: 1) your goals for the agreement; and 2) the business process behind achieving your goals. It is only through the understanding of what you want to accomplish, and how you go about accomplishing that goal, can an attorney adequately draft, or edit, a contract to ensure that it protects your key interests, and provides a commercially viable framework for the transaction.
