Business contracts often include terms that allow parties to get out of deals early, or require certain events to take place before the parties are required to act.  These terms can make great business sense as long as these conditions are understood and remembered once the contract is signed.

One local example will generate  numerous contracts with these terms.  It was announced earlier month that a new NFL ready stadium is going to be built in the Los Angeles area.  If built, it will be a huge boon to the local economy and businesses will be lining up to get their piece of the pie.

However, there is still a large amount of red tape to cut through before the stadium can be built and games played.

With the vision of this new multi-billion dollar facility on the possible horizon, local and national businesses are preparing to capitalize. Having 80,000 consumers coming to the area each week during the football season brings with opportunity for restaurants, shops, entertainment, and a variety of other businesses.

Some smart entrepreneurs and businesses are already preparing for this best-case scenario by entering into contracts for commercial rental space, advertising, etc.  However, these savvy businesspeople do not want to take a gamble on the stadium deal falling apart leaving the business with financial obligation that will not pay off without the stadium and fans.

These fast-acting business people are likely going to seek terms in their contracts that allow them to void their proposed contracts if the stadium does not get built within a certain timeframe.  This gives businesses an agreement that will be enforced only if the stadium is built.  Basically these contracts will say “if the stadium is built by a certain date, then my company will do X, Y, and Z, and if the stadium is not built by the certain date, my company does not have to do anything.”

Negotiating contracts in this manner can make a lot of sense for businesses and individuals on each side of the deal.  These types of conditions are common, and it is likely that some of your business contracts have similar provisions.  These provisions may not eliminate all responsibilities- they may require even more responsibility.

Perhaps the most common condition in business is a condition for late payments.  If your company pays the bill late, then the service provider is entitled to an extra fee, but only if the payment is made after a certain date.

Take a look at the contracts you and your business have right now and be sure to note the conditions in each of them.  You can save your business money and yourself stress just by understanding these conditions and recognizing when they will apply.  If you are negotiating a business contract, be sure to include conditions if your business needs will changed if certain things happen or don’t happen.

Of course, if you need some help figuring these out – contact us and we will be glad to help you figure things out!