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Why well-written contracts are important for businesses

On Behalf of | Jan 25, 2023 | Business Transactions

Businesses in New Jersey know what they need done by other businesses and customers. They may need different supplies from other businesses. They are also selling their products or services to other businesses and people. Most businesses understand that they need to have contracts to ensure that both sides of the transaction do what they say they will do.

Writing an effective contract involves more than just the basics of what both sides want the other to do. If there are terms in the contract that are ambiguous or leave certain obligations up to interpretation, it can not only lead to litigation but also may allow the other side to avoid their obligations.

Ways well-written contracts are helpful to businesses

Well-written contracts are a necessity for businesses and The Writing Center at Georgetown University Law Center provides some important tips for writing contracts. While some legal language is difficult to understand, for the most part, it is important that contracts are written in easy, plain English that both sides easily understand. This allows both sides to know their obligations.

Contracts also need to go beyond simply stating the basic obligations. Contracts should be very specific when stating the obligations and leave as little as possible up to the discretion of the parties. Also, while contracts will not be able to address all possible circumstances that may occur in the future, the contract should at least address the foreseeable circumstances that affect the parties’ ability to follow the terms and complete their obligations.

The importance of reading the contract

Businesses in New Jersey use contracts every day. Many times, they sign the contract without a thorough review or may use the same basic contract in many different situations. This may save time initially, but it can create major problems later on. If the company needs to go into litigation, it can be both time-consuming and costly.

Taking the time to draft each contract well and precisely tailoring it to the specific transaction can help companies avoid this. Experienced attorneys understand how to draft contracts and may be a useful resource.


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