I bet most of us haven’t studied contract law. That shouldn’t be a reason to get into a badly worded contract. It also shouldn’t be a reason to shy away from signing a contract.
So, this article aims to make sure you get a fair shake. Before you sign it, here are a few thing you should know about the contract. There a few things you might ask for or need renegotiated. If in doubt, seek a second opinion before you sign the contract. I gave a tip on how to access quick legal advice. Should you be in a position to go forward, here is what to do…
- Do your due diligence.
Find out all you need to know about the party you are engaging in business with. Do they have the right standing with the law? Do they engage in legitimate business? Do they honour their previous contracts? Any doubts that might lurk in the back of your minds should be addressed at this point. Research on all you can find about the people you are about to engage in business with
Also as you find out the history of your partner, scrutinize the document for any loopholes that might be used against you or vice versa. If you do find any, in good faith, alert your partner and address them. Remember ignorance is no defence. So when things go wrong, you can’t say you didn’t know.
- Read the contract thoroughly.
Go through the agreement as many times as it takes to ensure that you clearly understand every clause and phrase used in it. Consult your prospective business partner in case of doubt. Should you still feel uncertain, seek a third opinion. As I had mentioned earlier, you can find advocates ready to help you at the Milimani court, High Court, and several other courts around the country.
The document is meant for your mutual benefit. Should you have a problem interpreting or understanding some legal terms, ask them to rewrite the contract to suit you. Be bold enough to protect your business, brand and yourself at all times.
- New content, terms and conditions
This is a major challenge especially to creatives and intellectual property. Before you get to the signing of the document, you should have reached verbal agreements on main terms of the business relationship. The signing of the contract should come after you have defined the scope of the agreement, what they are receiving / delivering and agreed the commercial and financial parts. The agreement is meant to give both sides, security certainty and formalize the agreement.
If you find new details at this point, do not brush them off. If you have to, start of the process from the very beginning. It may be necessary to seek counsel if the problem persists. Remember, you and your business are equally as important as the other business/party.
- When and how payments due should be made.
Though these details will be agreed before the contract is signed, the contract should have a section solely dedicated to financial details and the schedules related. The details should be very specific with actual; numbers, percentages and currency clearly stated. If payment will be made on completion of certain tasks or goals, ensure that the definition of “completion” well and clearly stated. This is especially necessary with projects that will have several stages. Clarity and specificity are key to avoid shifting goal post and delayed payments.
- Are you able to get out of the agreement?
Should you wish to terminate the contract, are you able to get out of it? What happens if circumstances change and force your hand? The contract should identify steps to be taken and circumstances that allow you to initiate termination procedures. Contracts, like marriages should not lock you in permanently, especially when you need to get out. The document should state what happens after the termination and how much liability ( if any) is held by both parties. You don’t want legal action to be taken against you for a contract you walked out on.
- Are the terms fair?
Are there any words that seem overly harsh? Does it seem to be skewed in the other parties favour? If you feel like you will be working with one or both hands tied behind your back, don’t sign the contract just yet. Negotiate for fair terms before you sign anything. Also if you feel some of the obligations are not fairly distributed, raise your concerns and have them be dealt with effectively.
There are so many more details that you will need addressed depending on the contract and on the business. But before you sign that contract, make sure you are looking for number one i.e. yourself.