Slate’s Law Blog

The Most Important Parts of a Business Contract are Often Overlooked

The Most Important Parts of a Business Contract are Often Overlooked

When news websites report on business contracts, they tend to report on the most eye-catching and aspirational parts.  How much money is changing hands?  When does the project begin and how awesome will it be?  What other business deals have the parties to this contract previously signed?  Likewise, when business deals fall apart and result in legal disputes, the media tend to focus on the sordid details.  Who lied to whom?  Whose egregious mistakes caused this business deal to tank?  How much money did the plaintiff lose in the business deal?  He’s in so much debt that even if he wins this case, the family court has ordered him to immediately pay how much to his ex-wife in overdue alimony and child support?  When you sign a business contract, as excited as you may be about the impending business deal, do not focus on the news headlines that you imagine will result from this agreement.  Instead, take a deep breath and read the fine print.  Better yet, if your mind is racing and you can’t focus on the fine print, hire a Santa Fe breach of contract lawyer to draw your attention to the details of the contract that you were too excited to read.

Dispute Resolution Procedures

All business contracts should contain provisions about how to resolve disputes that arise from the contract.  For example, it should contain procedures for voluntarily early termination of the contract, including compensation that the party that backs out of the contract early must pay to the other party.  It should also provide instructions about notifying the other party if it is in breach of the contract and deadlines for repairing the breach.

The contract should indicate which courts have jurisdiction to resolve disputes arising from the agreement.  If both parties are based in New Mexico, then the New Mexico courts are the obvious choice, but there may be room for disagreement if the other party or the project is located in another state.

If possible, do not agree to mandatory arbitration or give up your right to litigation.  Arbitration in business contracts favors big companies, whether they are plaintiffs or defendants.  If you are an employee or a small business signing a contract with a large corporation, then you are putting yourself at a disadvantage if you agree to mandatory arbitration and waive your right to file a breach of contract lawsuit in court.

Force Majeure Clauses

Force majeure clauses state that, in the event of a major disruption outside the parties’ control, non-performance of contractual duties does not constitute breach of contract.  These clauses can protect you in the event of natural disasters or other emergencies, but they should be as specific as possible about which emergencies count as force majeure events.

Contact Slate Stern About Breach of Contract Lawsuits

Slate Stern is a business litigation lawyer who represents plaintiffs in breach of contract cases.  Contact Slate Stern in Santa Fe, New Mexico or call (505)814-1517 to discuss your case.