Let’s face it, running a business = making deals, right? Making deals = coming to an agreement. Generally, coming to an agreement assumes that there will be some type of contract to memorialize said agreement - that’s an immutable fact of business life, and unfortunately one that involves a whole lot of “legal mumbo-jumbo.” Seriously, that’s what a client of mine legitimately called it one time. The most important thing to understand is that contracts in business should be, and generally are, designed to cover four main things: 1. Outline the agreed upon deal. 2. Specify the duties of each party in regards to the deal. 3. Specify the consequences of breaking the deal - a breach of contract 4. Wrapping everything up at the end of the contracts term. Broken down, contracts are rather simple in form, however the language used in them can be dense and difficult to follow. (Or, an all around snooze fest of the ladies of Muse have told me more than once.) And, for that reason, I - an attorney turned marketer/business consultant, decided to put together a list of key terms to know and understand when reading through your next contract for a business deal or a marketing agreement. **Please note - this blog post is brought to you by one too many coffees and my trusty copy of Black’s Law Dictionary.** - Contract: An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.
- Effective Date: The date on which a contract becomes enforceable or otherwise takes effect.
- Term of Agreement: Sometimes just listed as the Term; A contractual stipulation specifying the life of the contract. Usually this will be detailed as a term of months or years, or sometimes it will specify the specific end date of the contract. In other words, the term of the contract starts on the effective date and ends on the date specified in the Term of the Agreement.
- Representation: A presentation of fact to induce someone to act.
- Warranty: an express or implied promise that something in furtherance of the contract is guaranteed by one of the contracting parties.
- Indemnity: a duty to make good any loss, damage, or liability incurred by another
- License: a permission granted to a party of the contract
- Intellectual Property: a commercially valuable product of the human intellect, in a concrete or abstract form, such as a copyrightable work, a protectable trademark, a patentable invention, or a trade secret
- Scope of Work: a contractual provision that highlights in summary fashion what work is to be performed under the contract
- Cure: to remove legal defects or correct legal errors (i.e. be able to fix a breach in the agreement).
- Breach of Contract: violation of a contractual obligation by failing to perform one’s own promise, by repudiating it, or by interfering with another parties performance. For more about Muse, what the team gets up to or ways to improve your marketing strategy - stay tuned for a lot more blog posts and only a little bit of legal mumbo-jumbo, we promise!
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Written By: CEO Jeff Zuckerman