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How can I draft my contracts to avoid breaches?

On Behalf of | Jul 19, 2023 | Business Law

If you are a business owner in Kennewick, Washington, you may have to deal with various contracts with your customers, suppliers, partners, employees and other parties. Contracts are legally binding agreements that define the rights and obligations of each party and help prevent misunderstandings and disputes. However, not all contracts are well-written or clear enough to avoid breaches, which can result in costly litigation and damage to your reputation. To minimize the risk of contractual breaches and protect your interests, you should follow some best practices when drafting your contracts.

Name the parties properly

The first step in drafting a contract is to identify the parties involved and use their legal names, state of origin and principal place of business. This will make it clear that the contract is between the businesses and not between individuals. For example, instead of writing, “John Smith” or “Smith’s Plumbing,” you should write “John Smith, doing business as Smith’s Plumbing, a sole proprietorship organized under the laws of Washington, with its principal place of business at 123 Main Street, Kennewick, Washington 99336.”

Describe the material terms

The next step is to describe the main purpose and scope of the contract, such as what goods or services are being exchanged, how much and when they will be paid for, when and where they will be delivered or performed and what warranties or guarantees are provided. You should also specify any conditions or contingencies that must be met before the contract becomes effective or before a party can fulfil their obligations.

Address dispute resolution procedures and remedies

Another important aspect of drafting a contract is to anticipate and address any potential disputes that may arise from the performance or interpretation of the contract. You should include a clause that specifies how the parties will resolve any conflicts, such as through negotiation, mediation, arbitration or litigation. You should also state what remedies are available to each party in case of a breach, such as specific performance, damages, injunctions or cancellation of the contract.

Do not forget the standard terms

In addition to the material terms of the deal, you should also include some standard clauses that cover common issues and scenarios that may affect the contract. These clauses may include force majeure, severability, assignment, modification, waiver, notice and an entire agreement clause.