We all know you should always read a contract before signing it. After all, your signature commits your business to legally binding obligations which can be difficult to get out of once the deal is inked.
It’s also essential to get legal advice first – even though skipping a lawyer’s input might seem like a good way to save money.
It’s not.
Here are three reasons why:
- Contracts are often difficult to understand
Entering into a contract is serious business. So it’s important to fully understand what you’re getting yourself into before you put pen to paper.
Sadly, though, contracts aren’t known for their readability, are they?
There’s the legal jargon for starters – incomprehensible terms and confusing sentences that can be difficult to understand without a legal background.
If you get the meaning wrong or misinterpret a critical clause, you could find your business legally bound to undesirable terms and obligations. These could harm your interests, both now and in the future.
And remember, once you sign a contract, you usually can’t walk away from it. So if you fail to perform your end of the bargain, you could be in breach of your obligations and face the stress and expense of litigation.
Getting legal advice before you sign is the best way of preventing this. A good commercial lawyer translates complex legal terms into simple English, so you fully understand what the deal entails. They’ll ensure you understand the rights, obligations and risks of the contract and draw your attention to any unfavourable terms.
- A good lawyer protects your interests
Contracts should clearly explain the rights and obligations of everyone involved. And, sometimes, these are weighted in one party’s favour. For example, a commercial lease often favours the landlord.
But contracts aren’t set in stone. So you should never be afraid of negotiating terms or insisting on changes to protect your interests.
While you can do this alone, it’s advisable to have an experienced commercial lawyer on your team. Why? Because they can quickly spot terms that may be considered unreasonable or unfair and can provide you with the advice you need to negotiate better ones. This can save you plenty of money in the long run.
And, as it’s likely the other parties have a lawyer involved, getting legal advice helps level the playing field.
- Legal advice can prevent misinterpretation
Sometimes, contracts are badly written and full of ambiguous language that’s open to misinterpretation. In the worst-case scenario, this could mean signing a contract that’s riddled with loopholes that could put your business at risk.
Other times, the contract doesn’t accurately reflect what you understand the terms of the deal to be.
A good lawyer can help you fix either issue before it causes problems down the line. Misunderstandings are a common cause of legal disputes that put a hole in your pocket and lead to broken business relationships.
Blaine Hattie is the principal solicitor at Sutton Laurence King Lawyers. Navigating the complexities of contract law can be tricky. It doesn’t have to be. Get the legal advice you need to protect your business by working with an experienced commercial lawyer. Contact Blaine on 03 9070 9810 or for help.