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Simplicity is key to positive business relationships, not tricks

On Behalf of | Aug 4, 2022 | Business Litigation & Disputes |

When you find a supplier who can reliably import a material that is hard to come by, you may want to solidify a verbal agreement in writing. Contracts help businesses make their expenses and schedules predictable. A well-written contract protects your company and creates mutual benefit when both parties fulfill obligations to one another.

Unfortunately, some people will use the contract as an opportunity to gain leverage over others. They will hide their true intentions or couch biased terms in dense language that the other party doesn’t understand. While it may seem tempting to include hidden provisions in your contracts with other businesses, doing so will not only hurt your working relationships but also your reputation.

Simplicity and honesty can go a long way when trying to run a successful company.

How do people play tricks in their contracts?

There are numerous ways for one individual or business to use a contract to victimize another party. Including a clause demanding liquidated damages in the event of non-performance is a perfect example. Some companies will impose a stiff penalty, possibly requiring two or three times the amount lost in compensation. Others may include sneaky provisions that allow them to cancel the contract after a minor mistake by the other party.

While it is frequently possible to use complicated language to trick other people, doing so is not good for your company’s reputation nor likely for its longevity. Disagreements about that hidden clause could drag you into court. Not only could you potentially lose a breach of contract suit, but the court case could draw widespread attention to your contracts.

Other customers, clients or suppliers might stop doing business with you when they realize how close they are to potentially triggering a massive penalty or how unfavorable the contract is.

Reciprocal honesty and simplicity are the best policies

If you want someone to trust you and to continue doing business with you for years to come, you need to treat them with respect. Talking honestly and simply about your intentions and what, if any, financial penalties you build into the contract is crucial to maintaining good relationships with other local companies and your client or customer base. If you run into difficulties, give us a call.