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The importance of updating your business contracts

On Behalf of | Oct 1, 2020 | Business Formation & Planning |

Well written business contracts are essential for your company’s smooth running and the longevity of your business relationships. Yet, situations can change. That is why it is vital to revisit all your business contracts from time to time and ensure they represent both parties’ current reality.

Why do business contracts go out of date?

Many business relationships have suffered over the last year:

  • Suppliers may struggle to keep you in stock of items you need. It could be because their suppliers are also having problems.
  • Customers may no longer require that you supply them with the amount they agreed to buy at the outset. Yet, their customer base may also have diminished.

You might feel that a contract is a contract, and the other party must stick to what they agreed. However, if doing so pushes them further down the road to ruin, it benefits no one. Empathy and flexibility are essential if businesses are to survive.

With 2021 looking likely to be another challenging year for many industries, now is the ideal time to take a realistic look at your business agreements. Being proactive is far easier than dealing with contract breaches after a problem has occurred. If it is too late, and the breach has already happened, seek advice to discover ways of resolving the situation in an amicable manner.

Consider mediation or arbitration. A customized approach to your needs can help settle matters outside the courtroom, reducing time, cost and conflict. Good relationships are hard to come by. It is worth doing all you can to keep them and avoid litigation, which would almost certainly result in the loss of the relationship.

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