Business in general is defined by supply and demand or selling and buying, and customer contracts are a common foundation for these principles. While these agreements are designed to protect the rights of the parties involved, it is possible for them to contain invalid clauses due to state consumer laws or for them to be breached by a party. Before you enter into a customer contract, it is highly recommended to enlist legal counsel to assist with reviewing and analyzing its components.
What Are Customer Contracts?
Contracts are an essential cornerstone of business, and customer contracts are one of the most common in the business world today. These documents are written and binding agreements that a seller or merchandiser enters into with a buyer or customer.
Customer contracts are a key component for protecting businesses that are buying or selling goods with other parties. Without them, a business could stand to lose a substantial amount of money, and potentially even more.
Purpose of Customer Contracts
The main purpose of customer contracts is to protect the rights of the parties involved in a business relationship, and this can take a variety of different forms, including:
- Movement of products
- Product supply
For example, if a business agrees to purchase “x” amount of product and sell a specific amount of that product without returning it but finds that some of the product is damaged upon arrival, this is an issue that could rely on the verbiage and terms of a customer contract.
Things to Consider Before Entering into A Customer Contract
Any time a business is entering into a customer contract, it’s important to have a trusted business attorney review it before signing. These individuals have experience in looking for specific protections for businesses in regard to:
Federal and state consumer laws can dictate certain forms be used or that a special format or procedure be followed for customer contracts.
Particularly when it comes to non-litigate or acceleration clauses that may or may not be allowed due to consumer law, an attorney can help a client spot if such clauses should be included or excluded.
Federal and State Business Law
It is possible for some verbiage to be used in a customer contract that is prohibited by federal or state business law, which could in turn affect the document’s validity in a court of law.
Although it is still a contract between seller and customer, it must still be considered reasonable. Any elements considered unreasonable, such as price gouging, should immediately be considered a red flag.
How A Reputable Attorney Can Help with Customer Contracts
There are two primary ways that a reputable business attorney can be an asset when it comes to customer contracts and protecting a party’s rights:
- Reviewing and simplifying the contract itself
- Assisting with violations of the contract
When it comes to reviewing and simplifying a customer contract, an attorney can:
- Ensure the contract meets federal and state consumer and business laws
- Look for specific clauses that could be considered invalid
- Verify the reasonableness of elements in the contract
- Spot potential red flags before an agreement is signed
- Ensure the customer contract procedure is followed to the letter by all parties
If there is reason to suspect that a customer contract violation has occurred, an attorney can assist with:
- Meticulously reviewing federal and state business law procedure
- Identifying potentially misleading or unfair business practices
- Addressing a breach of contract
- Securing damages or refunds with a court injunction
Violations of customer contracts can be serious business with some resulting in punitive fines, monetary damages, or court injunctions. Because federal and state laws can govern these dealings, if there is a violation that affects both levels of law, it could be seen as a violation on each level, which would likely yield considerably more penalties.
In the event that a breach of contract case would end up before a court of law, an attorney who has overseen the contract from the beginning can be an invaluable asset for legal representation.
If customer contracts are becoming a part of your business, do not leave your rights unprotected. Consult with an experienced and reputable business attorney today about the best way to proceed with this type of contract and ensure protection for your business.