Contracts drafted by a South Florida business attorney don't exactly conjure up warm fuzzies the way donuts do for Homer, do they? Just the thought of them gives the average person a headache. Even Google doesn't like contracts – not the business kind, anyway. Try to Google anything specific to business contracts and you'll get a bunch of results for multi-million dollar deals offered to men who throw and catch balls. Otherwise, the subject of contracts is not something most people want to read willingly.
Who wants to read an article about something that's known to be long, dry, incomprehensible, and contain the kind of fine print that will bite you in the butt when you least expect it? That's what makes this Simpson's gif hilarious. An angry Homer, pulls away from Marge, defiantly crosses his arms and proclaims, "We're not signing anything unless it's a contract!"
Actually... Homer would be pleased to know his insistence on a written contract is the right idea. If you gain an understanding of contracts through Homer Simpson's eyes, at the most basic level, you'll finally be able to cast the misconceptions aside and put contracts in their proper perspective, which will then enable you to use them as another tool to help you achieve your business goals.
Let's look at the most basic definition of a contract from Wikipedia: "A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement." Surprisingly, perhaps, the word "written" is nowhere to be found in this definition – which brings us to the first of four common misperceptions about contracts.
If it's Not in Writing, It's Not a Contract
We bet you’ve heard it before. It's not an uncommon belief among most people that if it isn't on paper, then it doesn't exist. Taking advantage of this misconception, some individuals and businesses even use it to their advantage to avoid rendering services or making payment.
In reality, just having a discussion with a salesperson or service professional and agreeing upon certain terms can sometimes form the basis for an oral contract. In these types of scenarios – oral agreements – intent is a major factor. When one of the parties has performed their end of the agreement, fulfilling their end of the “contract,” courts are more likely to deem the agreement enforceable.
OK Then, Who Needs a Written Contract?
Now that you know oral agreements may be enforceable in court, you definitely want to get that contract in writing. If you don't, and you find yourself in court for a perceived breach, how are you going to prove orally-agreed upon terms? A written contract avoids the problematic "he said, she said" arguments that plague breach of oral contract lawsuits. Very simply – a contract in writing clearly defines expectations of each party and what happens when those expectations aren't met. This creates a “meeting of the minds,” which forges the way for a productive, long-term relationship and increased profits. The black and white of written words does not allow for emotions, opinions, or selective memory, and may settle disputes without the need to step foot into a courtroom.
Contracts are Costly
Convinced that professionally-drafted contracts are expensive, many people turn to the internet and opt for DYI contracts. More often than not, DYI contracts are problematic and require an attorney to totally revamp them, which is more costly and time-consuming than having an attorney draft a contract in the first place. Add in lost potential revenue and time spent on discovering skewed/onerous terms – and now you've got one costly contract! This all-too frequent scenario perpetuates the myth that contracts are expensive.
Contracts are Complicated
Ridiculously long, complicated contracts are fodder for jokes and movies, but this doesn't have to be the case. A contract need not be 30 pages of legalese in 8-point font whose purpose is to serve the lawyer. In fact, Paul Lippe, founder of Legal OnRamp stated, "Contracts today are a roadmap for dispute resolution." A contract's purpose is quite the opposite of instilling fear and uncertainty. Lippe notes, "... contracts – and the process by which they are developed and agreed – should be assisting in generating clarity and shared understanding for all those who they affect." In fact, a good contract should be comprehensible and user-friendly enough to serve as a reference guide. Keep in mind, the ultimate purpose of drawing up a contract in the first place is to create the conditions that will yield the outcome you want.
Your First Step
In an unpredictable, fluid business climate, the only thing we know for sure is change is inevitable. Whether you're just starting up a business or your business agreements are oral and/or don't accurately reflect how you conduct business, consult with an attorney now.
At Loshak Leach LLP, we operate with a business mindset because our ultimate goal in partnering with you is to contribute to your business success. Contact us today for a free consultation at (954) 334-1122.