Getting Started on a Bilateral Contract: New York Perspective
No business arrangement is complete without the establishment of a bilateral contract–a written, legally binding agreement between two parties3 min read
No business arrangement is complete without the establishment of a bilateral contract–a written, legally binding agreement between two parties. Entering into a bilateral contract can be intimidating, and for good reason: more than just the sum of its transactional parts, such a document highly influences the present and future fortunes of the entities that sign it. Here, then, is a quick rundown of how to get started on your own legal agreement.
What is a Bilateral Contract?
A bilateral contract is a type of legal agreement between two parties that outlines the terms of a given transaction. These agreements often involve multiple elements, such as payment terms, performance obligations, and dispute resolution measures, among many others. Moreover, they are traditionally negotiated and drafted before any of the parties signs on the dotted line.
The need for a properly executed bilateral contract extends far beyond simply affirming a given agreement. Indeed, this document can help you increase the ease of interaction with and understanding between both parties’ representatives—as opposed to more informal arrangements that can muddle communication and cause complications.
New York Regulations
At the outset, you should acknowledge the local statutes that govern contract law in your region. In the case of New York, any contract involving more than $5,000 in the sale of goods must be in writing and signed by the party to be bound. The agreement must also include a statement of each party’s name and address.
Additionally, the State of New York forbids any contract that substantially impairs the rights of a third party, or any contract made as part of a lottery or consisting of schemes for the protection or advancement of interests in political or religious doctrines. New York law also requires written leases for real estate, and it’s important to note that either party can bring an action concerning an agreement to secure performance.
Identifying Your Contracting Partner
In many cases, the contracting partner may be readily apparent. Other times you may need to research within your geographic area, industry, or other networks to find the ideal fit. Whomever it is, make sure to inquire into their reputation, business practices, and policies to make sure they are dependable and trustworthy when it comes to fulfilling the obligations they’ve agreed to.
Knowing Your Negotiation Points
Once you’ve identified the contracting party, it’s time to turn your attention to the nuts and bolts of the document itself. In general, most agreements contain some or all of the following elements:
A clear statement of the parties’ rights and obligations
The contractable duration of the agreement (including when and how to renew)
The amount and origin of the payment involved
The currency of payment
An acknowledgment of the parties’ respective rights in the event of a dispute
Compliance with relevant laws and regulations
Privacy and confidentiality provisions
The ability of either party to terminate the agreement
The specifics of each item on this list should be clearly outlined in the document’s text. When possible, negotiate with the other party to craft language that benefits both parties and eliminates the possibility of confusion.
Getting Professional Assistance
Establishing a bilateral contract is a daunting process, but luckily there are many people prepared to guide you through the process. If you’re based in the New York area, you may wish to consider UpCounsel. With its unique network of experienced attorneys, UpCounsel offers businesses of all sizes and budgets the peace of mind of knowing their interests are being well-protected.
Knowing how to navigate the steps required to create a suitable bilateral contract serves to protect the interests of all involved parties. To that end, it pays to have a solid understanding of local regulations and a keen eye for detail. Finally, don’t be afraid to get the professional help you need.