How Do You Structure a Business Contract to Avoid Litigation?

A poorly drafted agreement doesn’t protect you, doesn’t accomplish what you intend, and can lead to expensive court battles. Talk to a Las Vegas business contract lawyer today to make sure your contract has clear terms that protect your interests and minimize any possibility of litigation.

Avoiding Litigation in Your Las Vegas Contract

Enforceability

First, a contract has to have the basics that make it enforceable. There must be an offer, acceptance of that offer, consideration made in exchange, and mutual intent to be bound by the contract. Without each of these, the agreement won’t hold up if challenged.

Clarity

Clear definitions make all the difference in the world. Terms like “delivery date” or “quality standards” have to actually be spelled out so you avoid the possibility that you and another entity have different interpretations of what they mean. Whenever anything is at all vague, it opens the door to arguments over what was actually meant.  

Details

The contract must also include specific details on things like how performance will be measured, when payments will be made, and precisely what action or inaction will trigger any clauses.

Forward Thinking 

Think through what problems could arise and allocate responsibilities clearly. Make sure that you distribute risks fairly and think proactively about how to keep small issues from turning into big problems.

Key Provisions to Include on the Advice of Your Business Contract Lawyer

Your lawyer will help you identify exactly what provisions you need. Remember that while templates are handy, there can be serious issues when things aren’t customized to your needs. Talk to a lawyer and make sure you get a review of your contract to ensure it’s fit to purpose and in compliance with Nevada law.

Most contracts will need promises about what the current state of affairs is. Indemnification requires one party to cover losses if certain events happen and can go a long way to preventing a direct lawsuit by clarifying who pays for what under certain circumstances. Limitation of liability caps the amount one side can recover, and that encourages the parties to come to a settlement rather than go to court.

You may also need to include provision for how any changes to the agreement will be handled. Morality clauses can also be helpful. These set some behavioral standards that will protect your company from reputational harm by allowing you to enforce those agreed-upon standards or even terminate a relationship without fear of litigation in response.  

Finally, consider alternative dispute resolution and building it into the contract from the beginning. A negotiation clause would require both parties to discuss their issues first, often at the management level, before escalating to a lawsuit, and this often allows for problems to be quickly resolved. Mediation is a confidential process that can be useful in resolving bigger issues, and when you can work things out through mediation, it tends to preserve business relationships.

For assistance with contracts or disputes here in Las Vegas, contact the Hutchings Law Group.

Posted in Uncategorized | No Comments »