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Posted By Jennifer Willis-Jost, ASU Law Group, Tuesday, December 10, 2019

Agreements are the Foundations of your Business –Make Sure they Meet your Needs and Ensure your Success.

Are you getting conflicting advice? You’ve been told to get things in writing, but when things go awry and you ask for help, your mentors are shocked: did you really sign this? Many aspects of your business revolve around agreements – you offer to sell a product or service, customers accept. You solicit bids, vendors quote, you negotiate or accept. You recruit, make offers, and hire workers. Contracts can be as simple as an offer and acceptance -- the essence of your trade. When does it makes sense to be in writing and when do you check with an attorney before you sign?
These tips are for business owners about Promises, Promises.
Handshake deals are valid and enforceable in Arizona. Your promise is the same as signing your name to a contract. Look out for these types of contracts which by law must be in writing in Arizona and signed (digitally or inked) to be enforced:

➢ Real estate sales
➢ Leases longer than one year
➢ Contracts taking longer than one year to complete
➢ Agreements to pay someone else’s debts
➢ Purchase, sale of goods valued at $500 or more
➢ Business loans, extensions of credit greater than $250,000
➢ Contracts lasting longer than the life of the party performing the contract

Oral contracts work fine - until they don’t. If you haven’t put the basics in writing, it is your word against theirs.
It makes sense to “get it in writing” to protect your business and the terms of the deal. This in turn helps you get paid, get what you paid for, limits your risk, and provides a remedy if the other party defaults. Written contracts are nearly always more defensible.
Don’t Sign That [yet]
Contract mistakes can cost you money, or worse, which is why we say, “don’t sign that” until you’ve checked it out. Contracts are legally enforceable documents. Just because you made a bad deal is not good enough legally to get out of it.
Watch out for red flags:

➢ Multiyear term. Change is constant. You need flexibility.
➢ No termination clause. You always need an exit plan.
➢ No obligations on the other side. You promise, you pay, but no duty to deliver.

Before signing, review these contracts with your attorney or contract specialist:

• Settlement Checks, Releases, Waivers
• Confidentiality, Nondisclosure Agreements
• Leases – Real and Personal Property
• Hold Harmless and Indemnification
• Co-signing for Another
• Non-compete Agreements • Sale of Business Assets, Interests
• Real Estate Purchases, Sales
• Signing a Contract:
• after you’ve done the work
• a vendor’s quote/proposal
• after you got the job

Texts, IMs, Emails: Beware. Even though texts, instant messaging and emails are informal, courts have found these writings can satisfy legal requirements for a contract. Arizona recognizes ‘electronic signatures.’ A printed name at the end of an email, signature block, or “from” line, can be sufficient as ‘electronic signatures’ and binding. Train your workers about their IMs, emails and texts, to be cautious when proposing prices and deal terms, and not use legal terms like “offer,” “agree” and “accept.”
After all, the devil is in the details.

*This article is general legal information. Check with a lawyer for specific advice.

About ASU Law Group
ASU Law Group is a not-for-profit law firm with the purpose of hiring recent graduates of the Sandra Day O’Connor College of Law at ASU, to help them become practice-ready. To accomplish this, experienced attorneys mentor associates in core competency and professionalism skills, while delivering high-quality legal services. ASU Law Group provides a wide range of legal services for small to mid-size businesses and entrepreneurs including business organization, transactions, litigation, contracts, intellectual property, employment, real estate, leases, and professional and business licenses; for clients who are attracted to forward-thinking, collaborative services.

Tags:  legal  legal advice  legal services  small business 

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