As a business owner, you are routinely asked to “sign on the dotted line.” The document could be a purchase order, an equipment lease, or a bill of sale. Often, these documents are in fact contracts that impose obligations on the parties, even if they don’t say “Contract” or “Agreement” at the top of page one. I can’t overstate the importance of knowing what you are signing – i.e., being able to recognize a contract when you see one, as well as understanding the components of a contract and how they impact your business. I often say “think before you sign; review before you renew.”
Over the years, I have worked with many business owners who discover a little too late that they have signed a document that does not align with their intentions and may have costly consequences. For this reason, and under the theory that knowledge is power, I have put together the attached infographic to try to demystify and define the essential elements of a contract. In the coming weeks, I will be writing a series of informational blogs on each of the identified sections of this schematic to offer guidance for business owners as they approach the documents which are so essential to the health and profitability of their enterprise.