Entering into business contracts is an exciting milestone for small business owners. It likely signifies your progress, growth, and new opportunities. While most business transactions go relatively smoothly, specific contract provisions can help ensure they stay that way or offer protection in the event of a dispute. Consider these four clauses before entering into agreements.
- Liability: A well-drafted liability clause will set clear expectations regarding the extent of responsibility each party assumes within the contract. By carefully defining the limits of liability and allocating risks and limits appropriately, you can minimize the potential financial impact of disputes and protect your business’s assets. Examples include limitations of liability, indemnification, exclusions, comparative fault, or contributory negligence.
- Payment Clauses: All good contracts should contain essential, detailed information about everything to do with payment, including when you, as the service provider, will send the invoice during the project’s lifetime and how long after the invoice you expect to receive payment. If you see fit, you can include late fee clauses allowing you to charge a flat fee of the invoice if the client pays late. If you do this, make sure that they’re reasonable. Late fees can pressure late payers to keep current with their payments, even if you do not intend to charge them.
- Attorney Fees & Venue: Attorney fees and venue clauses can significantly influence the outcome of any disputed legal proceedings. By including language that allows for the recovery of attorney fees if there is a breach of contract, you create a deterrent against frivolous lawsuits and contractual violations. In addition, specifying a venue within your desired state can enable you to keep working with your preferred legal team and offer geographical convenience, cost savings, and familiarity with local laws.
- Confidentiality: When starting a relationship that involves sharing sensitive information about your business, a confidentiality clause is essential for safeguarding sensitive information between you and the other party. By defining confidential information upfront, you can prevent unauthorized disclosure and help you maintain your competitive advantage. They will help put you and your clients at ease and build the foundations of trust, which will benefit the working relationship.
At Buckley Fine, our experienced attorneys specialize in contract law and understand the challenges you face as a small business. We take a dedicated and client-centric approach to ensure that every contract is tailored to your needs, protecting your interests and minimizing potential risks.
Buckley Fine’s Tax Partner & CPA Vasili Russis
Vas Russis, partner at Buckley Fine, recently achieved a momentous win in the United States Tax Court, securing savings in excess of $1 million for his client. The case revolved around the sale of real estate and a 1031 like-kind exchange. After a tax partnership signed an agreement to sell real estate, the partnership was liquidated, and the eventual sale of real estate was made by the partnership’s individual partners. Mr. Russis’ client reinvested his sales proceeds in another piece of real estate as a tax-deferred section 1031 like-kind exchange. Following over four years of litigation where the IRS challenged Mr. Russis’ client’s reinvestment of proceeds as a like-kind exchange, the IRS conceded its challenge and accepted the taxpayer’s position.
With a proven track record of success, Vas Russis, and the attorneys at Buckley Fine stand ready to provide invaluable tax planning, estate planning, transaction structuring and defense assistance. Contact Vas at 847-381-0011 to learn more.