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The importance of having a clear contract

On Behalf of | May 24, 2023 | Breach Of Contract

Business relationships are crucial for any start-up or growing company. Among the factors behind a solid business relationship is a clear and well-defined contract that is not subject to misinterpretation. If you want that relationship to continue, you must have a well-defined and unambiguous contract.

A clear contract also means that you are protecting your company’s interests. On the flip side, an unclear contract may place your personal assets and business at risk. Not only must the contract be clear, but the provisions and clauses within this legal document also must be clear.

Certain ambiguities will be interpreted against the drafter

A good contract avoids confusion. The terms of the contract must be concise, but sometimes, that does not always happen. When ambiguity surfaces, a contract is bound to create conflict. And, sometimes, the only way to resolve such a conflict is through an arbitrator or a court.

In general, courts interpret an ambiguous contract against the contract’s drafter, but a crucial factor that a judge will consider is the intent of the contract. However, sometimes, a contractual disagreement may not be based on actual confusion, but rather an attempt by a party to avoid its obligation.

A clear contract remains the essential foundation that builds an effective relationship between two parties. Without a clear contract, that relationship may wither and not even take root.

Investing in your business rather than legal entanglement

An unclear contract truly is a failed contract that may lead to conflict and, ultimately, must be resolved before a judge. Such a scenario may lead to a prolonged and time-consuming process that also proves expensive. With a well-drafted and clear contract, you could avoid this scenario. And any company would rather spend money growing their business than fighting a legal battle.