The Critical Mistakes Business Owners Make With Contracts
STOP! Before you sign ANY contract, watching this video could save you from extremely expensive mistakes and a great deal of future worry. Business people often make the critical error of signing a form contract, or any contract for that matter, without a thorough review by an experienced lawyer. This can expose your company to significant, unforeseen liabilities.
In this essential warning, Phil Crowley, founder of Crowley Law LLC and a seasoned business lawyer, pulls back the curtain on common but dangerous pitfalls hidden in everyday contracts. He highlights two specific examples of clauses that can cause major problems if not properly understood and negotiated:
Unmasking Dangerous Contract Clauses
Indemnity Clauses: The Hidden Liability Trap
Many contracts include a promise by you to "indemnify" (cover the liabilities of) the other party in various situations. If these indemnity provisions are not carefully limited and clearly defined, you could be opening your company up to massive potential liability for issues far beyond what you intend.
The Consequences of Unchecked Indemnities
Unchecked indemnities can lead to devastating financial burdens and immense stress, often far exceeding initial expectations. Businesses might find themselves liable for damages, legal fees, and settlement costs that were never anticipated, potentially crippling operations or even threatening long-term viability if not properly limited and understood from the outset.
Integration Clauses: The "Complete Agreement" Deception
The Double-Edged Sword
This clause states that the written contract represents the entire agreement between the parties, superseding all prior discussions or oral promises.
The Danger of Unrecorded Promises
While this can be protective, if you've been promised certain things verbally that are not included in the final written document, this clause means those oral promises may become unenforceable.
The Solution: Ensuring All Promises Are Recorded
It's absolutely essential to ensure that all important promises and understandings are appropriately recorded in the final written contract.
Beyond Clauses: Protecting Against Other Contract Traps
These are just a couple of examples of how seemingly standard contract language can create significant problems. There are many other aspects of contracting that can be traps for the unwary.
Secure Your Business: The Value of Proactive Legal Review
Phil stresses that you must discuss these critical areas with an experienced business lawyer to better protect yourself, your company, and your hard-earned resources.
Don't let a poorly reviewed contract undermine your business. Understand the risks before you commit.
If you're about to sign a contract or regularly deal with business agreements, this video is a must-watch.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
