When businesses enter into a contract, they need to be aware that too often what may seem like a harmless agreement can become the source of a legal dispute down the road. Therefore, it is imperative for businesses to keep a few key points in mind when drafting and signing a bilateral contract, especially in Texas, where a variety of state-specific regulations apply. Dallas-based business attorneys can provide valuable insight when considering the top five things to think about when negotiating a contract.

A contract is an agreement between two or more parties that obligates them to fulfill certain terms in exchange for something of value. Businesses use contracts to express their formal intentions to another party, whether they are selling goods or services, leasing property, entering into a partnership, or acquiring another business. When two parties enter into an agreement, they become legally bound to uphold specific rights and responsibilities as specified in the contract.

A bilateral contract is a type of contract that involves each party making commitments to the other. This differs from a unilateral contract, where only one party is obligated to fulfill their commitments. Bilateral contracts are often used in business settings for a wide variety of purposes, such as the sale of goods and services, employment agreements, and long-term leases. When two parties enter into a bilateral contract, it is important that they understand the potential consequences of undertaking this type of agreement. Consider these five points that can help you protect your interests and avoid costly disputes.

First, make sure you clearly define the scope of the agreement. A contract is only enforceable when the intent and purpose of the agreement is understood by both parties. Make sure that each party is aware of the commitments they are making, including any specific obligations they may have to the other party. Furthermore, specify a timeframe for performance as well as any contingent events that could affect the contract, such as changes in the market or tariffs.

Second, create a breach of contract recourse. If one party fails to fulfill their obligations as outlined in the contract, the other party should have the right to seek legal recourse. By specifying a breach of contract recourse, both parties are protected should the agreement break down.

Third, establish a communication protocol. In many cases, disputes arise due to a lack of communication between two parties. For this reason, it is important to create a communication protocol within the agreement. This communication protocol should stipulate the agreement’s primary contact person, the method for dispute resolution, and any other methods of communication that should be used for clarifying points in the contract.

Fourth, be clear about the terms of payment. When negotiating a bilateral contract, it is important to be specific about the terms of payment. This includes specifying a negotiated amount of payment, outlining the frequency of payments, and specifying any additional fees or expenses that may be associated with the agreement.

Finally, make sure you understand the governing jurisdiction. When entering into a bilateral contract, it is important to understand the governing legislation in the state in which the contract is formed. This is particularly important in Texas, where laws vary from jurisdiction to jurisdiction, and local business attorneys can provide valuable insight on legal considerations to keep in mind when forming a contract.

Overall, when entering into a contract, it is important to pay attention to the top five points to consider when negotiating a bilateral contract. By taking the time to discuss the scope of the agreement, establish a breach of contract recourse, create a communication protocol, specify payment terms, and understand the governing jurisdiction, businesses can protect themselves from potential disputes in the future.


Bilateral contracts,

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