Businesses do best when executives can concentrate on product development, profits and growth. However, there are times when legalities get in the way.

One way to avoid legal problems is to ensure that your contracts are thorough and enforceable. A solid contract should contain specific elements.

Names

Identify the parties involved. Use legal names and other identifying information such as titles and addresses.

Obligations, considerations, terms and conditions

This is the essence of the contract. Spell out what each party will do for the other party. Define the degree of quality the client may expect; for example, you may complete an app by a certain date but not guarantee it will be 100% free of bugs. Include warranty information.

This portion may include details about what your firm does not include in the price, such as taxes, shipping or regulatory fees. This is also the section where you address payment terms.

Consequences

Specify what happens if either party fails to meet the terms of the contract. These may include additional charges if payment is late. Determine how you and your client will handle disputes; for instance, you may wish to require mediation or arbitration.

Credit services

Virginia law includes special guidelines for contracts between credit services and consumers. This contract must include payment terms and contain a notice of cancellation. If you are in the credit service business, pay special attention to these mandates.

A well-written contract serves multiple purposes. It clarifies your mutual expectations so that you and your client are on the same page. It gives you a reliable roadmap regarding goods and payments. It can protect your firm from circumstances you cannot foresee and may shield you from litigation.