Many business owners take it upon themselves to create their own agreements with information available on the internet. Unfortunately, there’s no way of telling if these agreements fit the bill and protect you like you’d like. Alternatively, they might have a series of emails and/or text messages that they think makes up a contract. It doesn’t. At best, these exchanges might become evidence in a lawsuit or mediation in an attempt to piece together terms of an agreement.
While it’s essential to put agreements in writing, something I highly encourage, it’s very important to compose these business documents with 
professional guidance to protect all parties, mitigating conflicts, misunderstandings, and lawsuits.
Key Elements to Put in Your Small Business Agreement
A contracts-knowledgeable pro can work with you to tailor an agreement particular to your business. In general, here are a few recommendations that will benefit every business owner.
Reign in scope creep. Agreements should have a clause that limits your “agreement” to the written document (so you don’t get stuck with unintended changes from some passing conversation you have with a partner or client). Without it, the scope of your contract could be broadened in a court of law well beyond what you intended.
Get signatures on changes. Make sure amendments are signed by both parties so that there’s no misunderstanding of what changes were agreed upon.
Include how to resolve disputes. Dispute resolution sections might require the parties to first submit to “non-binding” mediation (can be binding as well) that is more informal and less costly to resolve their differences if they are unable to resolve things amicably. If that doesn’t work, you can go to more formal (and costly) arbitration or even directly to court.
Address “what if” scenarios ahead of time. Sometimes the parties fail to address what should happen if the business breaks up, fails, a person dies, and so on. These are real world problems. Upon separation, for example, specify who owns the assets, website, name, logo, recipes, photos, social media accounts (and it goes on and on). You’d be shocked as to how much money is wasted arguing about trivial things.
Include term limits. The renewability of an agreement is specific to the document at hand so it’s important that you address the “term” of the agreement or contract in the written document itself. If not, it may be deemed to be in effect in perpetuity which can lead to other problems. Many agreements renew automatically (usually annually), unless cancelled or terminated (same difference) by one of the parties in accordance with certain rules in the agreement. For example, term and renewability are very important in a real estate situation. A landlord doesn’t want you as a tenant forever with no ability to adjust your lease. As a tenant, you may want a longer lease to keep your business stable and in its current location. Often, a compromise is an initial term (for example, 5 years) with one or more options to extend the lease.
Notarize agreements or have them witnessed. A lot of people skip this step (even if there is a witness line) thinking it’s not important. But it will be if the other party claims they have no recollection of signing the agreement and claims it’s not their signature. People generally do not make these claims to defraud you. They simply don’t remember correctly.
At the end of the day, everything comes down to the written word. It will keep partners together and maintain amicable relationships with customers. If conflict does show its ugly face, you will be able to refer back to the agreement and resolve things much quicker.
Mitchell Beinhaker is a business lawyer and estate attorney who runs a virtual legal and consulting practice representing business owners, entrepreneurs, executives and professionals. He is an author, speaker and host of The Accidental Entrepreneur Podcast where he interviews entrepreneurs, inventors, authors and social media influencers. His legal practice, Beinhaker Law, provides business and estate services to small business owners, new and established. To learn more, visit BeinhakerLaw.com.