MAKE YOUR CONTRACTS WORK FOR YOU, NOT AGAINST YOU

Contracts are not just legal formalities; they are foundational tools that clarify expectations, outline responsibilities, and provide recourse if an issue occurs. For small businesses, getting the details right can mean the difference between a smooth engagement and an expensive dispute down the line. Therefore, contracts should be drafted with careful consideration and should not be reused without revision. Whether you are working with clients, independent contractors or vendors, here are some tips to make sure your contracts work for you and not against you:

1. Be Precise About Scope, Deliverables, and Deadlines: Each contract should clearly define what work is being performed, what is included and excluded, when it is due, and how it will be delivered. Ambiguity around scope, deliverables, and deadlines can lead to disputes that will not only delay projects but also jeopardize business relationships because it erodes trust, creates friction over perceived obligations and can make future engagements less likely. Being detailed makes it easier to hold both sides accountable.
2. Protect your Intellectual Property and Confidential Information: If your business involves creative work, proprietary materials, or client data, you should include provisions addressing ownership and confidentiality obligations. The contract should clearly state who owns the final work product and the underlying materials used to make the final work product and whether your business can use the final work product in its portfolio. In determining ownership of intellectual property, it is imperative that you know both industry standards and your own preferences to strike a balance that protects your rights and meets the expectations of clients.
   
3. Include a Fair and Clear Termination Clause: A strong contract includes an exit plan. Contracts should state the conditions for either party’s termination, especially if there is a cure provision, how much notice is required, and what happens to any payments, works in progress, or confidential information upon termination. 
   
4. Avoid One-Size-Fits-All Contracts and Seek Legal Opinion: Using the same contracts across different clients can expose you to unnecessary risk if the terms are not tailored to the specific relationship or work. Make sure each contract reflects your actual agreement, including key business terms, deliverables, and payment structures. Pay close attention to potentially risky clauses like indemnity provisions or overly broad non-competes. If you are unsure about certain language and potential implications, having a legal professional review the document can help identify red flags and ensure you are fully protected.

The SJS Law Firm, PLLC can help your small business draft effective contracts. For a complimentary consultation, please contact us at (202) 505-5309.