5 Important Tips for Making Solid Business Agreements

Making a watertight business agreement is essential for several reasons, with the most important being that it protects your business.
business agreements

Making a watertight business arrangement is essential for several reasons, with the most important being that it protects you. For instance, the other party involved in an agreement might do things that warrant you distancing yourself from them. You might also get into a legal dispute with the other party you are in business with. A good agreement will make such scenarios easier to navigate. Continue reading to discover more about how to make solid business contracts.

Put It in Writing

While oral agreements are legally binding in some circumstances, they are not easy to prove. As a result, they are hard to enforce in court. In fact, they cannot be enforced at all in some scenarios. A business agreement that is in writing, on the other hand, is a different story. Since the terms are spelled out and assented to by every party involved, it is easier to prove and enforce. The importance of a written business contract is that it protects you better than an oral contract or handshake.

Keep It Simple

A good and reliable business contract is one that is simple and easy to understand. Technical terms should be avoided unless necessary, and there is no simpler alternative. Also, ensure that there is no ambiguity whatsoever to every word and that the meaning of each is clear. These contract template examples can help you keep the agreement simple.

Ensure It Is Detailed

While you should aim for brevity, it should not be at the expense of clarity. If a section of the agreement is not easily understood, break it down. Address every detail, no matter how tiny or inconsequential it seems. A solid business contract is one that does not leave room for interpretation. It is one in which every term is plainly defined, such that the opposition cannot twist or dispute the meaning in a court of law.

Establish the Conditions for Termination

Spell out under which circumstances either party can terminate the contract. Doing this will ensure you are not at risk of a lawsuit for contract violation if you decide to terminate the agreement someday.

While you might be tempted not to include such in your agreement, you must do so. The other party might branch in a direction that wasn’t agreed upon in the contract’s early days. Such a change might adversely affect your own business and leave you no option than to terminate. Having a clause that spells out such scenarios in no uncertain terms can help protect you.

Consult a Professional

Finally, endeavor to seek a professional’s opinion when you are making a legally binding business agreement. This is especially true if there are a lot of knotty issues and legalities involved. A professional will be able to guide you and ensure you end up with a watertight agreement.


Having a solid contract can make all the difference between whether your business is successful or not. As such, you should endeavor to get it right. Ensure that you put it into writing, keep it simple and well-detailed. Also, establish the conditions for terminating the contract. By taking these steps, you can protect yourself or your business from potential liability.


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