In our practice, the two biggest problems that we have experienced are:
1.) Too Little Planning - This is truly the biggest issue. If a problem arises, not enough planning often leads to "Head in the Sand Syndrome." Unfortunately, problems involving the law won't go away on their own, and often could have been prevented.
2.) Too Much Planning - If too little planning is an issue, it is tempting to try and ensure you're protected in every possible situation. However, this is not the best solution, either. No one has a crystal ball to let them predict any possible thing that could ever happen. Thinking that this is possible leads to heavy-handed solutions which can damage the marketability of your product and can inhibit your ability to do business effectively.
How to Properly Balance Your Needs
Problems, in general, do not magically disappear, which is why you consider planning for them. However, a major issue on the other side is to solve the problem with such force that it actually impedes your business objectives. A good example of the latter is a blanket disclaimer of liability, which places a lot of risk on your customer. In many situations this is necessary, but often, a more balanced approach can address both parties' concerns, which makes your business more effective and approachable.
Striking the right balance when developing a contract comes from looking at the following:
- How many problems are you trying to avoid?
- How likely those problems are to occur?
- How much damage will it cause if it does happen?
It is easy to see how the preceding factors apply when you ask the question, "How long should my contract be?"
We have all seen contracts that go on for pages, but there are also those that fit on one page and are easy to read. Long contracts are useful (and even necessary) if you have a multitude of problems with a high probability of occurrence and/or will cause a high degree of damage. In this circumstance, a long and detailed contract is important to highlight and acknowledge every potential issue.
However, if you have just a few big concerns, you may find more value in creating a clear focus on your specific concerns. A longer contract may not be appropriate and could possibly cause those potential issues to get lost in all the text. Sometimes a short, concise, approachable and minimal page document will put those concerns on the table at the very beginning. This type of clarity is often more effective and can put both parties at greater ease.
This, of course, is only one example of the types of considerations that should go into properly managing your risk.
How Do We Help You?
Because of the number of cases that we have been involved in, we have a deep understanding of where and how relationships have a tendency to break down. In our initial meeting, after listening to your major concerns, we ask questions regarding these common issues, if they have not been previously addressed. This will allow us to provide you with the most complete picture possible in how to protect you and your business.
The cost of an hour or two of planning can save you a significant amount of time and money, compared to the cost of resolving an issue through litigation or trial. You may even learn that you have little to no exposure at risk. We have been able to help clients with only a short consultation without the need for any legal action. We are happy to provide peace of mind in these situations so that you can stop worrying and get back to making your business successful.