Well-crafted business contracts prevent breach of contract and other business disputes in San Diego and protect valuable business relationships. When asked at business conferences and speaking engagements and in meetings as general counsel I am often asked about the most important things a business owner should pay attention to. One of the greatest and most consistent sources of business mistakes, pitfalls that seriously disrupt or cause the demise of a business are quite simply business contracts.
Why Do So Many Small to Mid-Sized Businesses Underestimate the Value of Solid Business Contracts?
Why do so many small to mid-sized businesses in San Diego and Southern California underestimate the importance of getting this aspect of their business right? The real answer is usually related to cost. The business owner perceives the cost of having an attorney create a contract far exceeds the value, and they believe they can do it themselves through a download form site or by copying another contract off of the web or from a previous business experience and modifying it themselves.
Let’s take a closer look at these perceptions. The first is cost. The cost of a contract is directly related to the size of the transaction it governs, and the amount of risk assumed by the parties. If you are going to use a contract over and over (such as a sales or service agreement or employment contract) and you download or modify an online contract, every time you “reuse” the contract (modify it to fit the unique circumstances of the transaction) your “costs” and associated “risks” are going up.
Experienced business owners know that business disputes aren’t a question of “if” they are a question of “when.” The cost of resolving the business dispute is directly related to the amount of ambiguity in the contract you’ve created, and the amount of clauses related to California law you’ve inadvertently left out.
This is the great trap. When a business owner attempts to create their own contracts, they may save a few hundred dollars at that moment. However, the first time they become involved in a dispute with a customer, vendor or employee the initial cost of managing the dispute or resulting lawsuit will be measured in thousands or tens of thousands of dollars. Well-crafted business contracts prevent breach of contract and other business disputes before they ever happen.
Perhaps even more important than the actual dispute associated with a single transaction is the potential damage done to the business relationship governed by the contract. You may have a valued customer or vendor that is important to your business and its profitability. Poor contracts lead to disputes that result in protracted litigation and the destruction of valued relationships.
How Do Our Well-Crafted Business Contracts Prevent Breach of Contract
The second surprising fact about a Watkins Firm business contract is we aren’t creating it from scratch. That would simply take too long and cost far too much. The Watkins Firm maintains our own proprietary library of proven, battle-tested contracts developed over more than four decades of service to the San Diego and Southern California business, tech, real estate and medical / healthcare business communities.
We save our clients a substantial amount of time and money by custom-tailoring an existing, proven contract to meet their specific needs at hand. Our clients are able to draw on more than 40 years of experience here in San Diego and genuine business contracts originally developed for the specific application at hand that have been proven over the tests of time and thousands of real business transactions.
The most surprising fact is a custom-tailored business contract from the Watkins Firm is quite financially competitive with a downloaded form.
A detailed, carefully crafted contract should anticipate everything that might come up during the course of the contract period and provide specific strategies for how those developments and challenges will be addressed and resolved. The old saying is “the devil is in the details.” Business contracts must remove ambiguity and clearly establish the responsibilities and expectations of each party. What is the benefit of the bargain? What are the important time frames and quality measures? How and when will payment(s) be made? What constitutes the fulfillment of each party’s obligations under the agreement.
Breach of contract and other serious business disputes are built upon ambiguity. If the contract is clear, there is no room for dispute. The relevant facts regarding the performance of each party are readily obvious. Like a good road map, well-crafted business contracts prevent breach of contract and other disputes by establishing a clear path from the outset of the agreement to the completion of the business transaction.
Serious Businesses Focus on Strong Business Contracts
If you are serious about your business, one of the first details you should attend to is your business contracts. Your customers, vendors and employees will respect the quality and thoroughness of your agreements as well as the professional image they convey about you and your company. Our well crafted business contracts prevent breach of contract and other business disputes in San Diego and Southern California before they ever develop. Our cost-effective, proprietary, custom-tailored business contracts guide the parties step-by-step through their transaction or relationship.
Saving a few dollars to craft your own contracts is one of the most common and expensive mistakes business owners make. The relatively small cost of a well-crafted contract yields significant return on investment from any perspective. If you are interested in working with the Watkins Firm to review existing contracts or create new agreements we invite you to consider our recent podcast Episode 15 – Contract Law the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
