This is the next post in a series of articles discussing contract negotiation, drafting, and review in Tacoma or Olympia, Washington. The previous article provided an overview of the topics to be addressed throughout this series. It also stressed the importance of engaging an attorney with experience in commercial transactions to assist your business during the contracting process. This post will address the importance of memorializing business agreements in a written contract. If you need assistance with a contractual matter, contact our office today to speak with a lawyer.
Contracts play a vital role in business operations, whether a company is large or small. Real estate transactions, employment contracts, sales of goods, or new business opportunities can all involve contractual agreements. While verbal agreements are often technically enforceable contracts, they often create more problems than they solve. Cases based on a “handshake deal” are rife with disputes about the parties’ intent and promises and result in “he said, she said” disagreements. A written contract, on the other hand, acts as a legally binding, formal record of the parties’ intentions. When drafted correctly, a written contract should clearly identify all of the parties and clearly describe their promises and respective rights and responsibilities in connection with the transaction. A contract that is reduced to writing gives the parties proof of the initial agreement in case a misunderstanding arises in the future. It should also provide peace of mind.
In complex commercial transactions with multiple parties, it is essential to clearly outline the performance obligations and promises of each party. When the contract covers a long-term project, it can act as a frame of reference for parties throughout the term of the agreement. The written contract may also help avoid costly litigation common when disputes arise over “handshake deals.” Written agreements will often include provisions such as insurance obligations, indemnification, warranties (or disclaimers of warranties), non-competition agreements, etc. Even if these are implied in a verbal agreement and can be proven in a breach of contract action, such clauses may not be enforceable unless reduced to writing.
A prudent business person will protect their company’s interests by insisting upon “getting it in writing.” Knowledgeable commercial transaction attorneys can play an important role in identifying risks and negotiating contractual language to protect their clients. Attorneys can also help ensure that your dealings are enforceable. If you need assistance, contact our office today to speak with an Olympia contract lawyer. The firm also services the Thurston County cities of Lacey, Tumwater, and Yelm, the Pierce County cities of Tacoma, Puyallup, and Lakewood, the Lewis County cities of Centralia, and Chehalis, the King County cities of Seattle, Auburn, Bellevue, Burien, and Federal Way, as well as other areas in Washington, including Grays Harbor, Mason, Cowlitz, and Pacific Counties.