As a new business owner, or someone who would like to be one, it’s natural to seek inspiration in others who are more established. But when you read about mavericks who made fortunes by ignoring the rules, it can be easy to get confused. Running a successful business involves a lot more behind-the-scenes work than these stories portray.
Reality TV shows where high-powered business people make snap-second decisions do not give an accurate picture either. For every “I’m in” announcing someone wants to invest in you, there will be a complex contract to thrash out detailing the terms and conditions of their investment. For every “You’re fired,” there will be a human resources team scrabbling to ensure the termination respects labor laws and drawing up terms of severance packages, non-disclosure agreements and more.
Behind every great business, there is a lot of legal paperwork
Corporate contracts are the foundations on which any business depends. Without them, you leave yourself open to personal whim, unseen events and litigation. Yet, creating effective business contracts is not that simple.
First, you need to understand all the laws that apply to the agreement you want to put in writing. If the other party were to challenge the contract at a later date, a court would disregard anything agreed to that is illegal. Courts can also overrule an agreement they consider unfair, or where they decide one party was not competent to sign or only signed under duress.
Contracts are legally binding documents, so it is best to seek help when writing one or before signing one someone else has drafted. Putting pen to paper on a poorly written contract or one you do not understand could soon bring your attempts to emulate your business idols to an end.