In today's Freedom Friday blog and email newsletter, I want to talk about a topic, and its not really a question, but an overall area, and that's business law contracts.  I want to give a bird's eye view and talk about business contracts basics.  In today's Freedom Friday blog and email newsletter, I'm talking about business contracts basics in 2024.

I often get asked, “I'm starting a small business; I already got my LLC and my EIN, what other contracts do I need?”  The answer is going to vary, depending on the type of business you're starting, but as a small business owner in Oklahoma, you can expect to deal with a variety of contracts ranging from your sales and purchases to business partnerships, employment agreements, and many others.  It's important to work with an experienced business attorney to assist you in navigating all these contracts, because you may need to create some, and then you will be presented with others from vendors, and others who create their own contracts for you to sign in order to do business with them.  Here are seven (7) basic aspects of business contracts:

1.  The Parties

The first basic aspect of a business contract is the parties.  This may be an obvious area, but any standard business contract should clearly identify the parties which are signing the contract.  It's also important to distinguish between the individual signing and the company who is an actual party to the contract.  For instance, if your LLC is entering into the contract, you may be signing the contract on behalf of the LLC, but you need to distinguish between signing on behalf of the LLC and signing as an individual. 

2.  Rights and Responsibilities

The second basic aspect of a business contract is the rights and responsibilities (or duties) of the parties.  Any standard business contract should clearly identify and explain the rights and responsibilities (or duties) of the parties involved in the contract.  This part of the contract will also identify the terms of the contract, among other things.

3.  Remedies for Breach of Contract

The third basic aspect of a business contract is the remedies for breach of contract.  This part of the contract will explain what happens if there is a breach of contract, and what remedies are available if one of the parties breaches the contract.  Sometimes its just contract damages which are available, but other remedies may be available, including other types of damages, depending on the type of contract involved.

4.  Dispute Resolution

The fourth basic aspect of a business contract is the dispute resolution clause.  This part of the contract will identify how a dispute can be resolved between the parties, should one arise.  For example, the contract may require the parties to go to mediation before filing a lawsuit, or to go to arbitration instead of filing a lawsuit. 

5.  Attorney Fees Clause

The fifth basic aspect of a business contract is the attorney fees clause.  While there is such a thing as the “American Rule” which says each party pays for their own attorney fees absent a statute which allows for an attorney fees award, your contract may have a clause stating that the prevailing party in an arbitration or lawsuit can collect its attorney fees (and this is in addition to Oklahoma statutes which allow for attorney fees to be awarded in certain types of breach of contract cases).

6.  Integration Clause

The sixth basic aspect of a business contract is the integration clause.  This is the clause that states that what is agreed to in this specific written agreement is the final and “integrated” written agreement between the parties.  This clause will prevent the parties from presenting outside information from being considered in case there is a dispute between the parties, such as a verbal agreement between the parties to the contrary of what is outlined in the written agreement.

7.  Termination

The seventh basic aspect of a business contract is how the contract can be terminated by the parties.  No contract lasts forever.  Some contracts, by their nature, naturally terminate.  However, some contracts need a termination clause, in case there is a breach (which terminates the contract), or other event which would require the contract to be terminated early for a variety of reasons.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/