If you are the owner of a small business in Colorado, you may enter a number of contracts in order to do business and create growth. These contracts might outline the terms of employment, a partnership, a rental lease or a client’s project. These types of contracts will differ slightly, but the fundamental principles remain the same.

If you are concerned about writing a sound contract that will avoid costly legal disputes in the future, it is important that you take the time to understand what makes a good contract. The process of writing a contract does not need to be overwhelming or complex for it to be successful.

Make sure that all language is clear

A mistake that many business owners make is using badly written or inappropriate templates for a contract. They may blindly copy and paste certain terms containing legal jargon that can be problematic if a dispute arises. It is important that you focus on making all language clear and direct, and that all parties fully understand what is meant in each clause.

Consider including a recital

A recital is an overview of the intentions of the contract that is placed at the start of the document. It helps whoever is reading the contract to understand the context and the parties involved. This can help make things clearer to any reader, and can potentially aid in dispute resolution.

Avoid being ambiguous

One of the biggest causes of contract disputes is ambiguous language. It is important that every detail is clearly specified and any situation is accounted for. You may be able to avoid ambiguous language by having several people read over the contract and allowing them to highlight any ambiguities that they noticed.

Remember the purpose of any contract

A contract is simply a formal means of agreement. Its main purpose is to state the terms to which two or more parties agree, and to avoid disputes in the future. By keeping it simple but catering for every circumstance, this can be achieved.

If you are struggling to write a business contract or you are concerned about a future dispute, it is important that you know exactly how to protect yourself.