WAIT, Avoid Handshake Agreement for Growth

Majority of the SME business entities do not give any attention nor are intended keenly in executing any written contract forget about executing legal documents and most of the business is just done on Trust basis or you can say by keeping it simple by minimising documents at least. Well, trust was earlier had a great role to play in doing business and infact was a great way to deal with but with change in time the nature of doing business have also changed and also the factor which runs the market. It is also a fact that it is not wrong to say that executing legal document does calls for complicated paperwork and most of the SME business entities avoids getting into this complication of legal process. But is this the way to do the business and there is no risk? Well, it is very certain to say that it is a huge risk in doing the business with no written contract and some of the risks which can be discussed are as under:
  • Conflict between two business parties regarding payment method, product specification, service SLA, etc and this basically becomes the majority of times in relationship breakdowns and thereby customers and thereby goodwill and reputation in the market and devalue of brand image;
  • A business done without invoice comes with major risk of non-payment
There is no doubt that business done on Trust and no written contracts are good and simple but in an increasing complex legal environment it’s not worth taking these kinds of risks.
An experienced and skilled lawyer will any time provide the business entities with the right kinds of documents and infact can be of huge assistance in taking his guidance to develop the business templates which can be used in business on regular basis. The contracts if used properly can help business entities to minimise risk and maximise profit and also help in anticipating the risk in any business deal. The aim of any good law firm is to allow the business entities to just get on with business, rather than wasting time sorting out messes?
Written Contract, But Why?
• Two Parties entering into an document containing Terms and conditions gives a certainty of what product or service will be dealt with, how the payment will be taken care off, how to raise the invoices, other modalities of executing the business, raising of dispute, if any and so on. It is important to understand that if there is a terms and conditions being agreed upon for any commercial or non-commercial dealings, it completely set-out the intention and infact satisfy the contractual mindset which is popularly called as consensus-ad-idem and then there is no uncertainty about what the Parties’ rights and obligations are and this only saves a lot of time and cost if there is any conflict arises and having dispute resolution terms agreed upon only resolves the areas of disagreement between Parties if at all it comes up in a very friendly and amicable manner. In brief, having terms and conditions bring CERTAINTY of what to be done and to avoid, timeframes and so forth
• Having a clear terms and conditions being agreed upon between the Parties, it only gives a document which makes the Parties bound by such document and this helps majority times of any customers to make a wrong claim against another bound party and in case there is any dispute, Parties can take the assistance of their legal attorneys and take the clarity of their stand against the dispute being aroused and this ensure that no wrong claims are succeeded.
• It is widely accepted notion that a Business person has only two work to do in its business, Marketing and Innovation and else be taken care by its made system and hence executing Terms and Conditions only ensure protection of business and once there is a certainly in place and system in place to ensure having certainty, the Business Parties can focus on the doing the work and getting paid on time.
• Certainty document only gives the clear reading of various rights and duties as mentioned and agreed and this helps and enable the non-default party to make successful claims or purchase of goods in the event of any breach of agreed business terms.
• Having clear terms and conditions helps either parties to comply with Legal Obligations in all aspects and this also takes care of any customer related claims or IPR infringement claims and so on