Contracts are essential and complex. That is why even seasoned business owners can run into trouble if they ignore common contract pitfalls. Here are several contract mistakes that could harm your business and ways how to avoid them under Connecticut law.
Relying on oral agreements (Handshake deals)
Under the state law, contracts must be signed in writing to constitute a binding agreement. For example, a real estate sale will not hold up without a written contract. An oral agreement can leave you no legal recourse if the other side does not follow through. Always put essential deals in writing to protect your interests.
Missing required disclosures or terms
Some contracts must include specific details to be valid. For example, a home improvement contract must include:
- The contractor’s registration number
- Key dates
- Three-day cancellation notice
Removing such required terms can void a contract and even violate state law. It is automatically considered an unfair trade practice if you don’t comply with the Home Improvement Act. Thus, you should include the clauses required by the law.
Vague payment terms and lien risks
In Connecticut, unpaid subcontractors can file a mechanic’s lien on the property. You might have to pay twice if you do not pay your subs. To avoid this, use clear payment schedules and consider requiring subcontractor lien waivers. You should also state what will happen if there is a delay.
Missing Connecticut-specific rules
The state of Connecticut requires consumer contracts to use plain language. Unclear legal terms might violate this rule. Certain projects also must follow certain steps like obtaining proper building permits. Failing to meet these requirements can put your agreement at risk. Always ensure your contracts comply with the law.
Protect your business from the start
By avoiding these pitfalls, you shield your business from risk. Take the time to put your agreements in writing. Include required details and keep terms clear and lawful. Paying attention to contract details helps keep your business on solid legal footing.
