How to Avoid Business Contract Disputes With Customers

September 18, 2012

A large portion of Sacramento small businesses are able to sell goods and offer services without the need of a contractual agreement with their customers. After all, a contract is a set of mutual promises between the customer and the business - usually that the customer will promise to pay a defined amount in exchange for the business's promise that it will deliver a product or provide a service. In most small business models, a contract is impractical for the type of transaction to be conducted. For instance, you would not ask your customer to sign a contract in order to purchase lunch, nor would they sign a contract before a haircut.

In other business models, however, properly structured business contracts are essential. For example, a home remodeling company would want to have a work contract explaining exactly what work would be performed, what materials are to be used, and what the company can expect in compensation for its services. Similarly, a small business that manufactures large-quantity orders or small quantity orders of a specialty product would want to have a document that outlines exactly what is expected of all parties involved in the transaction. This is where a Sacramento business attorney can be a valuable asset. Only an attorney can evaluate your business model and tailor a sales or services contract that protects the interests of all parties involved.

When drafting your sales or service contract, your Sacramento business lawyer will ask a host of questions of you. Your lawyer will want to know every conceivable detail about the typical transaction for which the form contract will be used. The most common details included in these types of contracts are the task to be performed or the product to be delivered, the specific timeframe for completion or delivery, an itemization of all costs to be involved in the completion of the service or production of the good, and any guarantees or warranties that will govern the transaction. Where appropriate, the contract should leave blank lines for any portion of the agreement that is negotiable, or where there is room for customization.

Although specificity is the number one priority in a goods or services contract, a good Sacramento business contract attorney will make sure the document is both readable and economical with words. Unreasonably complicated contracts tend to confuse both parties as to their rights and responsibilities, while unreasonably wordy contracts tend to burden the business process. After all, if your customer has to hire his or her own attorney to interpret your business contract, you aren't likely to win many customers.

Sometimes, all the care and preparation in the world cannot prevent a business contract dispute. If this is the case, the same Sacramento attorney may be your best bet for winning the litigation battle. After all, your attorney should already be familiar with your business's model and goals, and the specifics of the contract at issue. In short, your attorney's number should be close at hand during all contract stages.