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Essential elements of a business contract

If you are thinking about starting a business in the Northern Colorado area but have yet to put your plans in motion, you may want to pause before moving forward. Though your venture may still be in the formation stages, it is imperative to know what to include in your business contracts. When structured properly, contracts prevent hassles and delays in the delivery of goods and services rendered. When it comes to business disputes and misunderstandings, the contract outlines the course of action all parties should take to resolve them.

A contract is an enforceable agreement. A poorly constructed contract can spell disaster. Before signing one, review the following key elements of a business contract.

Identify all parties. Include the name, title, company and contact information of all vendors, contractors and businesses you are working with in your business agreements.

Outline the terms. Incorporate as much information as you can about the services and goods to be exchanged. Document the quantity, description and date of delivery for all products and merchandise. Do not forget to add specific information about any services involved.

Provide payment terms. Before any money changes hands, you should include compensation details in your contract. Explain the amount of compensation, and add a payment schedule.

Add a dispute clause. Disagreements and disputes are common in the business world. A dispute clause outlines the steps all contractual parties should take to resolve them before pursuing litigation. Though it may seem faster to go to court to correct contract breaches, including strategies that enable all parties to settle their issues can help preserve the business relationship and, quite possibly, the contract.

Depending on your business needs, you may want to include additional elements in your contracts. You could also benefit from researching contracts similar to your business venture and having an attorney review agreements before signing. 

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