The 3 Worst Contract Mistakes You’re Making – And How to Fix Them!
We know you’ve got a lot on your plate, from managing your team, putting out fires and also growing your business. But there’s one critical aspect that often gets overlooked – your contracts. Yes, those seemingly boring pieces of paper can actually make or break your business. Even the savviest entrepreneurs can make mistakes when it comes to contracts.
There are a whole range of contracts that you should be taking care and putting you and your business in the best position possible. Think about it. You can actually influence your whole business environment to your advantage. Do you have really good shareholder agreements, leases, employment agreements, customer terms and conditions, website terms and contractor agreements in place? There are likely a few others to add to this list!
We’re here to shed some light on the three worst contractual mistakes you might be making, why you should care and what to do about it.
Mistake #1: Ignoring the Fine Print
It’s easy to skim through contracts or not even really look at them. However, the devil is in the detail and ignoring the fine print can lead to costly consequences. Hidden clauses, ambiguous terms and vague obligations can leave you vulnerable to disputes, claims and financial losses.
For example, a hidden clause in a contract could give the other party the right to terminate the contract at any time, for any reason. Or, an ambiguous term could be interpreted in a way that works against you. A vague obligation could leave you wondering what you or the other side are actually responsible for.
You can’t get out of a contract by saying you didn’t read it properly.
Solution: Take the time to thoroughly read every contract. If there’s something you don’t understand, seek legal advice. Or, if you don’t have time to read it, get someone else you trust to do it for you. We do it for clients all the time. At Milicevic Lawyers, our team of experts specialise in contract law, and we’re here to ensure you fully understand every agreement, get a fair and balanced position and minimise your risk and pitfalls.
Mistake #2: Using Generic Templates or Copying
In the digital age, it’s tempting to grab a contract template off the internet and call it a day. Or the tried and tested copy and paste from a competitor. While this may seem like a quick and easy way to get a contract, it’s important to remember that every business is different. What works for one business may not work for another. Oh, and do remember copying is illegal! Generic contracts can leave massive gaps in protection, leaving you exposed to unforeseen risks. A template or copying others may look good but it gives you a false sense of comfort and security. We have seen examples of wrong laws being referred to, different countries and even hallucinated clauses produced by Generative AI like Bard and ChatGPT. The sad thing about this is that these contracts actually did the opposite of what they were supposed to and added unnecessary costs and indemnities to our clients!
Solution: Invest in custom-tailored contracts. There are no short cuts, contracts need attention and to be carefully crafted. Milicevic Lawyers draft contracts that are specifically designed for your business and its circumstances. Our experts will ensure your contracts are robust, comprehensive and aligned with your goals.
Mistake #3: Neglecting Regular Updates
Your business is constantly evolving and so should your contracts. Failing to update your agreements can lead to outdated terms that no longer reflect your business practices. Laws also change and failing to keep up can make your contracts unenforceable or even result in financial or other penalties. This can be a ticking time bomb. Did you know that as of November 2023 there are financial penalties for having unfair clauses in standard contracts? Did you know the penalties can be millions of dollars just for having an unfair clause in your standard contract?
Solution: Make it a habit to review and update your contracts periodically and get lawyers to do it. Even better, get experts from Milicevic Lawyers to do it. Getting the right advice at the right time is invaluable. Milicevic Lawyers can help you stay ahead of the game, ensuring your contracts remain relevant, compliant and protective.
Ready to Take Action?
Now that you know the three worst contractual mistakes you could be making, it’s time to take action and safeguard your business. Milicevic Lawyers is here to be your legal partner, providing expert guidance, tailored contracts and peace of mind.
Contact us today and let’s discuss how we can improve your contracts and help you protect your business, assets and future growth.
Remember, your business success is our success, we want you to succeed for the long term. A contract is not just a piece of paper (or online text), it’s a binding legal document that can make or break your business. Reach out to Milicevic Lawyers today and let’s start building a secure future for your business!