A good contract can make a world of difference for your business. It is protective, keeping you safe against lawsuits and claims that could lead to costly litigation.
There are many ways that contracts can keep your business safe. Here are five to keep in mind.
- Arbitration clauses
The first way a contract can help is if you include an arbitration clause. Arbitration clauses make it so that you and any other party has to first go through arbitration rather than litigation. This can save you time and money while also keeping you out of court.
- Noncompete agreements
If you don’t want the people you’ve trained to go work for others in your field, you may want to use a noncompete agreement to limit their job opportunities for a period of time. For example, a noncompete could state that someone in your research department can’t work for a competitor for two years or within a certain distance from your company.
- Nondisclosure agreements
A nondisclosure agreement can also protect your business. It makes it so you have a way to pursue a claim if any of the private details about your company or products are leaked by a past employee, vendor or other party.
- Exit opportunities
Good contracts will be specific about when you can exit the arrangement. You’ll want to specify when you can terminate the contract without penalties. For example, if the vendor doesn’t deliver your products on time or you dissatisfied with an element of the service, you may want to have an exit clause that will help you end the relationship.
- Employment requirements and reasons for termination
Finally, consider having a contract for your employees with the requirements of their employment, such as wearing a uniform or following a code of conduct. Then, if they violate it, you’ll have the absolute right to terminate their roles with no questions asked.
These are a few things to add to your business contracts. With the right clauses, you can protect yourself and your business against liability, so you can avoid lawsuits and time in court.