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In today’s economy, buyers and sellers are concerned about protecting their hard-earned money and investments. To ensure that their assets are safeguarded for the future, a buyer and seller must be aware of how contract protections can benefit all parties involved in the transaction.
For this reason, both parties must seek legal advice from an experienced business attorney who can advise them of their rights, responsibilities, and what contractual protections are available for their particular needs.
Contact our law offices and ask to schedule a free initial consultation to discuss your business matter and what legal strategies may be available.
What are the Most Common Types of Contractual Protections Utilized in Business Transactions?
Contractual protections, commonly referred to as contract clauses, are legal phrases that address terms and conditions in business transactions. There are a wide variety of contractual clauses that are often used depending on the type of transaction that is occurring.
Some of the most common contractual protection include:
- Non-compete clause: A non-compete clause prevents a seller or their employees from participating in unfair competition by engaging in the same type of business or industry sold to the buyer.
- Indemnity clause: An indemnity clause grants protection to one or both parties by agreeing to pay compensation to each other for any losses that may occur.
- Confidentiality clause: A confidentiality clause obligates parties not to disclose proprietary information and is typically limited in the time that it remains in effect.
- Arbitration clause: An arbitration clause guides how disputes will be resolved before or after closing.
- Penalty clause: Also called a breach of contract, a penalty clause states the type of compensation that the breaching party must give to the other party if they do not live up to the terms of the contract.
- Exemption clause: An exemption clause defines the scope of liability for one or both parties involved in the transaction.
For more information about the types of contractual protections and how they can benefit your business transactions, contact our law offices, and ask to schedule a meeting with our knowledgeable attorney.
What Should Be Included in a Business Contract?
Aside from contractual protections, a business contract must include several other elements. Although every business contract will differ slightly due to the facts and circumstances surrounding the transaction, several elements must be included to ensure its validity.
These elements include:
- Identify all parties involved in the transaction, including full legal names and addresses.
- An offer that acts as a promise of what one party will do or not do in return for something else. The offer must use specific language and provide details of each party’s rights and responsibilities. However, an offer is not official until the requesting party receives it, at which time it can be accepted, amended, revoked, or terminated.
- Acceptance of the offer when the requesting party agrees to the terms outlined in the business proposal. Offers should always be in writing as another form of contractual protection.
- Mutual consideration by both parties to the terms and conditions of the contract.
- Competency on the part of both parties to enter into a legally binding contract.
- The lawful purpose of the contract is to have enforceable guidelines that act to bind both parties to the terms of the agreement. Additionally, there must be stipulations as to what will happen if a breach of contract occurs.
Why is it Essential to Hire a Business Attorney to Assist With Implementing Contractual Protections?
Contractual protections act to safeguard parties who have entered into business contracts. However, business agreements are often ambiguous and leave the door open to several legal interpretations that could harm your organization.
For this reason, it is always best to hire an experienced business contract attorney to assist you with your legal needs. A contract attorney has the skills and experience to draft legal documents that protect your interests.
All too often, businesses sign poorly written contracts that may have hidden clauses or leave room for potential disputes. As a result, many businesses suffer financial losses or damage to their reputation.
Our law firm is dedicated to helping individuals and businesses protect their hard-earned investments by drafting high-quality legal documents that stand up to legal scrutiny. Our legal team takes pride in ensuring that our clients have peace of mind knowing they have contractual protections.
Contact Venerable Law of Tampa Bay, FL, by calling 813-680-4530 and ask to schedule a free, no-obligation consultation to determine your business needs.
