One of the likely unforeseen challenges of owning a business is the need for a form agreement between you and your customers.
Do you hire a lawyer? Do you find one on the internet? Do you buy a premade form?
The answer depends on your needs and your pocketbook.
But, there are some things you need to be aware of when putting together your customer/client form agreement.
Most people believe that a contract is to state the terms of the transaction or deal.
You pay me $XXX and I will provide YYYY in exchange.
But that is only partially correct.
A contract is also a roadmap for when the deal does not execute as planned.
What are your rights and remedies if you are not paid or not paid on time?
What happens if you’re delayed or your supplier is delayed?
Or, if there is a disagreement, how is it resolved?
Most contracts, sadly, use boilerplate language to determine these things.
Many times it is an afterthought to the author of the agreement as they are more focused on the deal rather than the negative things that can occur in the transaction. This is a mistake.
You should also be wary of “cut and paste jobs” where the person or firm tasked with drawing up the contract simply uses an old contract as a template. Not something you want if the previous client was a huge multinational and you are a small to medium-sized business owner.
What should I look out for when setting up a form agreement?
There are things you need to look out for, and here is a good starting point for that.
1. What forum will decide your dispute?
(This will usually be called “venue”).
It can be in a court, arbitration or even an online arbitration. Venue specifically refers to the specific forum in which a case is brought.
In each city, county, state or country, there may be many available forums in which a case may be brought, but one specific forum may be more appropriate or proper than another or you can designate it in your agreement.
2. Who has the authority to decide your dispute?
You’re now saying, isn’t this the same as venue? It is not, and it is a critical piece of your dispute that should be listed in your contract. Authority is given by law to the forum to try cases and rule on your legal matters. It is vital to determine before a lawsuit is filed which forum has legal jurisdiction.
3. What is your choice of law?
What does this mean? It means that you may have your forum picked out, your jurisdiction agreed to and yet, which law applies? Is it the state where you are located? Where your customer is located? Or a neutral location’s law?
Typically your agreement should spell all of this out ahead of time so there is no legal challenge based on venue, jurisdiction or choice of law—something that can be costly and time-consuming.
The Brief arbitration clause is written to accommodate these issues and it should:
- Replace any dispute resolution clause you may have in your agreement;
- Replace any venue and jurisdiction clause you may have in your agreement; and
- It provides a section for you to choose the State law that you want to apply to the agreement.
With your Brief arbitration clause you now have your venue: “Brief’s Online Platform”
You now have your jurisdiction: All disputes arising from the Agreement will be decided exclusively by Brief.
And you have your choice of law to be applied.
Build your Brief Arbitration Clause
Can your business recover debt through Online Arbitration?
Brief has helped companies across the United States recover debts that were not worth the cost of traditional litigation or brick and mortar arbitration if not for online dispute resolution.
Satisfied participants include electronic commerce sites, factors, banks, MCA, and other lenders.
Brief also handles quiet title, warranty claims and other declaratory relief actions, and different types of monetary disputes.
Our screened network of Ejudges spreads across all 50 states, and each case is matched to the jurisdiction and subject matter expertise of the E-Judge.
Brief is a market-leading online arbitration platform in the United States. Our 100 percent online alternative dispute resolution platform helps businesses protect their contracts and agreements through online arbitration. Follow us on LinkedIn or Facebook for updates and news about online arbitration and more.
*Brief cannot and will not give legal advice on any matters, financial or not.