A Business Owner's Guide to Creating and Negotiating Contracts

Offer Valid: 06/15/2022 - 05/31/2024

Business contracts may not be fun to create or negotiate, but they're essential to business ownership. Understanding contracts and knowing how to negotiate the best possible deals can save you time, money, and frustration in the long run. The following guide can help you create and negotiate business contracts and ensure your business is protected and profitable in all aspects of your dealings with clients, vendors, and partners.

The Purpose of Contracts

Business contracts are essential to running and protecting your business. They let you define everything from your relationship with clients to your sales methods and approach. Business contracts can also protect you from fraudulent and malicious activity. For example, if a client or employee steals confidential information, your contract may state that it's illegal to use that information for other purposes. 

Understanding Contract Types

It’s a good idea to familiarize yourself with different types of contracts. There are three general legal agreements for business: employment contracts, non-disclosure agreements, and independent contractor agreements. Each one has its own set of rules and regulations. Ensure you know which type applies to your situation before proceeding. 

Creating an Effective Contract

Part of the reason it’s so crucial for your contract to be thorough is that you’re essentially putting a promise in writing. You're obliged to ensure each point is clear, leaving no room for misinterpretation on the part of the other party. With each point explained, you leave little room for doubt about what happens if any of those obligations aren’t fulfilled. 

When setting terms with another party, decide when either party can terminate the contract. For example, you might agree that either party may end involvement with a project or service upon giving 30 days' notice.

Negotiating Contracts

Negotiating a contract can be intimidating, especially if you’re dealing with an agent who has a reputation for being aggressive or a hard negotiator. Don't let these fears get in your way. Business is about making deals, and you can help negotiate more effectively by prioritizing key objectives and framing conversations around each one. When negotiations stall, it may feel like time is running out; however, rushing into a deal that isn’t right for you only leads to problems.

When working through disagreements between parties, try to settle things amicably by considering both sides. If one party feels treated unfairly or unjustly, take steps to protect yourself and resolve conflicts peacefully. But remember that disputes do arise — and sometimes these disputes threaten relationships even after all parties have tried hard to solve them.

Tools You Can Use

To create and modify your contracts,  you can extract PDF pages online for free to make another PDF. If you wish, you can use sections of an existing business contract to build a new contract. Create a PDF for your new contract by selecting and extracting the appropriate pages.

Good Business Contracts

A good business contract is more than something that protects you and your company. So, take time to negotiate terms that are mutually beneficial for both parties.

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This Hot Deal is promoted by McLean County Chamber of Commerce.