Business contracts involve a complex series of legal factors that add up to one solid business agreement between two or more parties. Today, we are going to briefly break down three elements that you will find in most business contracts and agreements.
- Limit of Liability – If one party of the contract breaches the agreement, the other party can seek compensation for damages. The limit of liability determines just how much the offending party can be on the hook for. This can limit the ability of the party that suffers indirect loss from a breach of contract to recover all of those losses.
- Termination – Contracts may have a number of different clauses that allow for the termination of the contract under different circumstances. For example, “termination on insolvency” would give either party the right to get out of the contract should the other party fail to make payments. A “termination for cause” clause would allow a party to give a 30-day notice of a breach of contract allowing an opportunity for the issue to be resolved before dissolving the agreement.
- Force Majeure – Natural events can affect a party’s ability to meet up to contract requirements. Think of the recent fires and floods throughout California. Contracts need to have a clause that accounts for a party’s inability to fulfill the agreement for a period of time due to anything from a natural disaster to a new governmental requirement.
Business Contracts and Agreements for Small San Diego Businesses
If you are a small business owner in the San Diego area, Pokala Law can provide you with affordable contracts and agreements advice and assistance. To learn more, call us today at 1-844-695-1487 or request a consultation using our online form.