Last week a client came into my office and said he had been sued. There was no written contract, but the other party was suing him because of delays, non-conforming materials used, and cost overruns on the job. Sadly for our client, no one wants to be sued, but this case will prove more costly because he did not take the time to write down on paper or by email the basic terms of his agreement. Most consumer and construction contracts can be drafted by an attorney for $500-$1,000. Not getting it on paper is about the dumbest thing a business person can do.
We can all agree that a contract is intended to lay out the terms of someone’s bargain with another person. From there, what terms are essential?
- First, think of what you are trying to accomplish. What is the purpose of this project, why are you needing this product or service, what are you trying to achieve? Speak from your perspective, not the other party’s. If you want a finished and painted wall, don’t worry about the size of drywall thickness, just say to match existing, etc. That being said, if you want the best paint quality, or a certain color on the paint manufacturer’s color chart, mention that standard since there are some choices that are particular to your standards that do not apply in every situation.
- Second, what could go wrong? Incorrect parts, bad quality, slow completion, not starting at the proper time, failing to show up every day, getting untrained workers? Whenever parties come together to form a contract they run the risk of the possibility that one or more parties will breach their end of the contractual bargain. Businesses and individuals who expect certain results at a certain time make a majority of contracts. To prevent a breach of contract you should always hire an attorney to review your proposed contractual agreement. Below are some helpful points to consider that may prevent a breach of contract.
- Be definite about the standards and completion requirements. d. Make sure you adequately explain the need for timeliness in your contractual agreement. When will the work start, and when is it to be completed by? When is delivery expected of the product? The more information you clearly articulating your contract the better it will protect you on the backend if a breach occurs. Courts tend to protect the freedom to contract. Unless a contract is made that would violate public policy courts generally will allow the parties to articulate exactly their needs and expectations. At the Strong Law Firm, we can look over your contract draft an offer our input, or we can create a contract from scratch after hearing your needs and expectations.
- Articulate what you will receive in the event of a breach. This is known as damages. If there is a delay in completion, what are you to receive? A discount or penalty for each day of delay? And if the product count was short, who pays to ship the missing part? If suit has to be filed, will you recover attorney’s fees to collect your damages? Absent a written term providing for payment of attorneys’ fees by the defaulting party, Virginia law rarely grants you a right to recover legal fees for filing suits to enforce a contract. If lost profits is the essential loss, then specify how much over an appropriate time, or by what measure the loss is calculated. While lost profits are recoverable in Virginia, you have to have a reasonably certain basis to claim that you had profits and how much, before you can recover these in a lawsuit.
- Spend time trying to anticipate potential problems that could arise as a result of a breach of contract, and write in language to anticipate those problems. One common mistake in contract drafting is people fail to think about the “what ifs” that might occur. Trying to lay out clear contractual language will make it much easier for you and every other party involved in the contractual agreement to perform. Everyone will be on the same page and able to function adequately. You always want to avoid the litigation process if possible because of the great time commitments and expense involved.
- Incorporate Government and Industry Quality Standards into the Agreement. If construction is involved, make sure that performance standards such as building codes and sufficiently sized materials are used. Also, make sure to expressly required proof of the contractor’s State Contracting license. Most trades people are required to be licensed by the State Contractor’s Board, and you will have more recourse against a defaulting contractor such as performance and payment bonds that can repay you in case of a default.
The Strong Law Firm we have extensive experience in contract drafting. We handle various types of business matters and offer in many instances flat rate fees for our advice. We understand that for your business and personal needs you need timely assistance that’s why we are here to help you articulate your needs in contractual form.
If necessary we can also put as a paid in the negotiation process of your contract. We can help you get the best contractual arrangement possible. This is particularly helpful if you are contracting for the sale of goods. we are not afraid to represent the best interest of your business and create a contractor will document that will better position you for success as an entrepreneur. If you have an existing contract that has been breached we can represent you and help you get this matter resolved.
For a review of your contract, give our office a call. We can make quick work of a response with review and additional terms to protect your interests in just about any contract you are needing. For more information feel free to contact our office today and make an appointment.