WHAT COVID-19 HAS TAUGHT US ABOUT BUSINESS TRANSACTIONS: PART 1 - CONTRACTS
Updated: Apr 4, 2020
As a millennial business lawyer, I take pride in counseling my clients on best practices in business. One piece of advice I find myself sharing most often, with both my large corporate clients and small business clients, is to avoid taking short cuts in business transactions; more specifically, I advise them not to enter into business deals without executing a written contract. What today's blog will focus on is the importance of using contracts for business deals and how one specific provision could've helped multiple businesses mitigate risk during this COVID-19 pandemic.
Mitigating Risks with Contracts
I'm sure many of you think it is common sense to have a contract whenever you plan to do business with someone; but the truth of the matter is, so many business owners and executives get so caught up in the hype of potentially making money, that they completely forget to materialize the details of their relationship on paper. While sometimes this doesn't initially appear to be an issue, it certainly becomes an issue when (a) the original parties in the business transaction are no longer with the companies, or (b) when a dispute arises regarding each party's obligations in the business relationship. Trust me, between bad memory and inaccurate perceptions, it is very easy to find yourself in a world of costly regrets without a written agreement. I've seen this come to fruition in multiple instances, even with multi million dollar corporate deals, and typically what it results in is thousands of dollars spent in court costs and attorneys fees. YOU DO NOT WANT THAT KIND OF PRESSURE!