Characteristics of Effective Business Agreements

2008-04-07 17:39:12

( Computers )



Importance of Effective and Successful Business Agreements

Whether it's a contract to outsource office functions or to obtain exclusive rights to sell another company's products, you must make sure that you have the proper tools to express your business agreements.

Properly conducted business agreements spell mutual benefits for you and the other party. Business agreements protect the interests of all parties concerned, as well as add to your integrity and attractiveness as an ally. For instance, software license agreements assure that the software applications will be used exclusively by the named parties only, and not by anyone else.

Any breach of business agreements will result in lawsuit as well as ill will between parties. Once the trust between you and your ally is broken, it will be almost impossible to recover it.

Making Business Agreements Work For You

The agreement must be in black and white. You also need to word out the terms of the agreement very clearly. You need to state explicitly who is responsible for what function, and be precise about the logistics on how the agreement is to be fulfilled.

Make sure that the key people, such as CEOs or top management, have read the business agreement carefully and have deliberated on its provisions before signing it. Sensitive spots such as deadlines and payment obligations must be discussed thoroughly.

You also need to agree as to what circumstances may cause termination of the contract, and to make sure that all parties are protected equally in case the agreement falls through. Furthermore, you need to specify damage control procedures and exact venues where the disputes can be mediated and resolved.

Getting Help for Your Business Agreements

By all means, you should always consult your lawyer regarding the preparation of a business agreement. He is in a better position to formulate the details and provisions properly in the agreement, and can suggest all possible fallbacks to your agreement.

If the other party was the one who prepared the business agreement, you should review it thoroughly as well with your lawyer to ensure there are no loopholes. Your lawyer can also help you negotiate for changes in case you were not fully satisfied with some terms of the agreement.


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