Oral agreements and contracts are enforceable in a court of law. Lawyers seem to get paid by the amount of words in a legal contract but that does not make the document better. In fact the more terms in a contract the more things there are to fight about between the parties.
Secret #1 Make sure the agreement is in writing.
Even though oral contracts in most states are legal and binding upon the parties, there are some areas of law where the contract must be in writing. Play it safe and put it in writing. A written agreement protects you much better than an oral agreement because it is at least a starting point to analyze the transaction and the intent of the parties.
Secret #2 Keep it simple.
Lawyers love to include a lot of legal terms such as “subsequent” “heretofore” and “aforementioned” in documents but in reality a majority of the time such legalese does little to add to the contract. Instead, make the document shorter with clear sentences and numbered paragraphs with headings to divide each new legal concept.
Secret #3 Before you enter into a contract ask yourself, “Do you trust this person or business entity?” If the answer is, “No”, walk away before you are out a lot of money.
If the deal appears too good to be true it probably is so don’t enter into an agreement that may cost you thousands of legal dollars down the road.
Secret #4 Identify each party correctly.
I am absolutely amazed at how many legal documents I have reviewed that did not contain the proper parties in the legal contract. The identity of the parties must be clearly stated. For example, if a business is a LLC make sure to name the proper business entity or person.
If you are uncertain as to the legal entity of the business it is better to name a party and let them out later on in the litigation when you identify all the necessary parties. If you forget to name the correct person and if you miss the statute of limitations you cannot amend a lawsuit once you have figured out that you sued the wrong person or legal entity.
Secret #5 Spell out the details of the contract in simple terms.
The body of the agreement should spell out the rights and obligations of each individual. If you add a handwritten notation or correction to the agreement make sure all parties initial the change in the document.
Follow these 5 secrets and you are on your way to saving money with business deals and legal fees.