Do You Know Your Contract Terms?

A recent national poll revealed that as many as 34% of homeowners do not even know what type of mortgage they had on their home. So, perhaps not surprisingly, many employees and business owners are unaware of the terms governing their contracts.

If you have a business dispute the first thing you need is get to know your written contract — what’s that, you don’t have one? Well, then you probably won’t get too far, since the old saying is that “an oral contract is only as good as the paper it is printed on.”

Your contract will govern the entire outcome and will be used to glean the parties’ intent in places where it is silent. Typically, the contract will not only provide the respective obligations of the parties, but may control where the dispute is heard (e.g., the “venue”), what types of dispute resolution is permissible (e.g., arbitration, mediation, etc.), the applicable law (e.g., while typically the state where the contract was prepared, parties can elect other applicable law), or even the available remedies (e.g., many contracts contain “liquidated damages” clauses).

Unfortunately, many people do not take the time to understand their contracts until there is a problem. If you are surprised at how many people do not know what type of mortgage they have, ask yourself if you really know the terms of your business contract.