The Top 5 Things to Consider for Bilateral Contracts in Los Angeles
Understanding Local Laws: Essential for Business Owners Entering into Contracts2 min read
When entering into a contract, it is essential that business owners understand the legal framework applicable in their particular jurisdiction, including any state or local laws. For those working on a bilateral contract in Los Angeles, California, having a strong grasp of the applicable laws is even more crucial. To ensure that all interests are well-protected and the chance of potential litigation is reduced or eliminated, it is important to consider the following five essential components when drafting a legally-sound contract.
1. Ensure Clear and Properly Formatted Drafting
One of the most important and often overlooked aspects of creating a contract is making sure the language and structure of the document is clear and concise. All parties who sign should be able to easily read and comprehend the agreement without confusion. Unless the document is clearly written, the risk of potential litigation increases significantly due to one party or the other misinterpreting part of the agreement or provisions. To make sure the document is easy to read, use simple language and avoid complex legal terminology.
2. Outline Responsibilities of Both Parties
The purpose of all contracts is to make sure an agreement is enforceable by a court of law. It should make clear to both parties what responsibilities they have both agreed to, and under what conditions. This includes outlining who is responsible for a certain task and what the party agrees to do or not do. It is often beneficial to have specific language that eliminates any potential confusion over who was supposed to do what.
3. Consider the Role of Intermediary Parties
When creating a bilateral contract, it is important to consider all potential third parties who could be involved. This could include entities like brokers, agents, or distributors who may be involved in transactions or governed by the contract. Each party should have responsibilities outlined, and it should be exclusive to their involvement. It should also indicate for whom they are acting on behalf of.
4. Clarify Dispute Resolution
When outlining the specifics of the agreement, the contract should include language addressing the resolution of any potential disputes that could arise from an infraction of the agreement. This could include details on the process of arbitration or the option of mediation should a problem arise. It is also important that the contract states which laws will be applicable for resolving a dispute.
5. Require Signatures from Both Parties
Finally, to ensure that the contract is legally binding it must include the signature of both parties. Unless both parties have provided their signatures, any stipulations or promises outlined in the contract are not enforceable in a court of law. Additionally, having the signature of both parties serves as good record-keeping practices and can provide further proof that both parties had agreed to the terms of the contract.
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