Employees and employers both come into contact with many different types of agreements and contracts all the time. Whether they are in regards to their employment, vendors, or various services, all contracts are important and should be reviewed carefully. It’s essential to know the basic pitfalls and clauses to look for in a contract.
We can help your practice get up to date and prepared to minimize breach risks from third-party vendors. Subscribe to stay current and up to date on important matters that will impact your practice. (To subscribe to our blog click here).
As contract language varies greatly from contract to contract, you should always review them with your attorney.
Some key things to watch out for when reviewing your contract are:
- Term and termination Clauses – It is essential to know when your contract starts, how long it lasts, and how you can get out if it when you want to terminate. Some contracts have hefty consequences or fees for early termination. Other contracts only allow for termination if there is a breach of the agreement.
- Automatic Renewals – Many contracts have automatic renewals that lock you in for an additional period of time. If you agree to an automatic renewal, make sure that you have favorable termination rights.
- Blanks – Do not leave anything blank in a contract. Blanks can lead to disputes down the line. Make sure to fill in everything, dates, services, etc.
- Forum Clauses – Forum clauses say where the contract is interpreted and governed. This can lead to expensive litigation, depending on the forum selected.
- Covenants Not to Compete – Covenants not to compete prevent you from being able to perform certain services in a designated area for a period of time.
- Mistakes – if there are mistakes or something is not clear in the contract, redraft it.
Make sure everything you agree to is in the contract. If something is not included, it will likely be unenforceable.
Don’t fall into the trap of failing to negotiate because you trust the company, employer, etc. Companies change hands and employees leave, but the contract will still control the nature of your relationship.
And always contact your attorney to help protect your interests and avoid pitfalls before signing any agreement.
We publish vital information on health law, business law, IT law, and more every Wednesday and Friday. To get this important information delivered directly to your mail box, click here to Subscribe.
Do you need help with your policies and procedures or negotiating contracts with third-party vendors? We can help. Contact Rickard & Associates today!