Why You Should Get It In Writing

These may be the four most important words for an entrepreneur or small-business owner who often operates on a “handshake” principle: Get it in writing.

The challenge and excitement of starting a new business can lead to entering business agreements haphazardly or with complete trust of the other party, especially if it is with a family member. Your business contracts should protect your own business interests first.

Written business agreements and contracts accomplish the following:

Defines the Relationship

Business agreements and contracts provide the details of the expectations of each party. If everyone knows what they are supposed to do and what happens if they don’t, issues, when they arise (and they will arise), can be resolved much easier.

Reduces Potential Costs From A Dispute and/or Litigation

The reason that verbal contracts can cause problems is that parties change, memory fades, and details get fuzzy. Without a written agreement, a judge or jury will have a hard time determining which party is right. It becomes a “he said/she said” scenario. A well-written business agreement or contract with parties that you do business with i.e. customers, suppliers, contractors, partners, shareholders, co-members of an LLC, and investors, is a basic best business practice and one that you should not ignore.

“Get it in writing” may be the best business advice you can receive, but also keep in mind that just writing down an agreement is not the same as having an enforceable contract to protect your business. That is why it is important to seek an experienced attorney’s advice when entering into a business agreement. It is well worth the investment as the cost of misunderstandings or disputes could be much more costly in the long run.