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Key Contract Clauses for Business Contracts

Regular review of your business contracts is an important and inexpensive way to ensure that if a customer, supplier, or employee fails to pay, perform, or work as agreed, you have legal options. Well-written and thorough contracts can be used as both a sword and a shield, which is why it is important to update them to ensure that they include key provisions.

While each business’s contracts must be custom tailored to its specific needs, there are some often overlooked, general contract provisions which can be important and should be considered for inclusion in your company’s agreements. The following are important contract clauses to consider:

Confidentiality Clause – to ensure that a company can compete at its fullest potential, a confidentiality clause is vital to a contract. It ensures that company information does not fall into the wrong hands. This is a restrictive clause that outlines how trade secrets and confidential information may be kept safe, by preventing parties from misusing the business’ proprietary information.

Force Majeure Clause – translating to “greater force,” this clause is for situations when parties cannot carry out their obligations due to unprecedented and unexpected events. The force majeure clause outlines and explains the parties rights when circumstances arise that are beyond anyone’s control. In fact, the COVID-19 global pandemic is a prime example.

Dispute Resolution Clause – in the case of disagreement, a dispute resolution clause will outline how to resolve the matter. This clause will allow the parties to try to settle disputes through negotiation, expert opinion, mediation, or arbitration. In cases where the dispute cannot be resolved through these methods, the contract may allow for escalation through the courts. In addition, the dispute resolution clause may also state which party is responsible for the costs and fees associated with litigation.

Attorneys’ Fees – related to the above dispute resolution clause, an important contract clause is an attorneys’ fees clause. This clause describes which party is responsible for payment of attorneys’ fees and costs in the event of a dispute. While there are pros and cons to this clause, it’s an important one to consider for all business contracts.

The attorneys at VRS can assist you with your business contract needs and have extensive experience in both drafting and litigating business contracts. We strive to ensure that your business contracts include all the elements needed to create a long-lasting business relationship and reduce risk to your own business and integrity.