Contracts, whether related to business or personal affairs, are legally binding documents that tie more than one person to a set of terms and conditions. When errors occur in contracts, it can have devastating effects. Examples of contract errors include grammatical and punctuation mistakes, rushing the redlining phase, and checking the document manually rather than with computer software.
As a business leader, you will be responsible for both writing and signing various contracts. If you come across any errors that could jeopardize the contract, then you need to know how to deal with them professionally. You also need to avoid legal discrepancies as far as possible, and here is how to do it.
Report the Error Immediately
The simple act of not speaking up can have legal repercussions. This instantly questions the validity of any contract. If a mistake is identified by the court, it will become void ab initio. This means that the contract was never entered into legally, therefore, no parties can be liable for the terms and conditions. As a business leader, you need to report any error you spot as soon as possible. Failure to disclose the mistake will not only void the contract but could result in further legal issues for the business.
Contracts are something upon which every successful business is based. When a contract goes back and forth between parties, there is bound to be a mistake here and there. Whether it is spelling, punctuation, or grammar, these are still errors that need to be reported. These types of mistakes are easy to make; however, they may change the entire context of the contract. If a word is spelled incorrectly or punctuation marks are used inappropriately, the terms and conditions could be interpreted differently by other parties.
Rely on Digital Resources
You may have checked a document more than 10 times, but someone else will still find a few errors. Even if you have a team of people all checking the same document, some errors will still get through. The only way around this is to put the contract through a digital program – one that will not only identify spelling mistakes, but also tell you when a sentence isn’t clear and when the context of your phrasing doesn’t fit.
Contract editing tools are useful and you can check any type of legal document that you need. Computer algorithms are built by incredibly smart people. These programs can help to speed up the contract review process and teach you how to write more concisely. You can find free contract editing tools that are fast, efficient, and instant.
Invest in Professional Liability Insurance
Contracts can be anywhere from one page to a few hundred. Any small error can have a major impact if it is not dealt with immediately. There are ways that you can avoid these hassles altogether. Purchasing business insurance protects the company from unexpected financial costs. Even time constraints can void a contract if it is not filed in time. A particularly important type of liability insurance for business leaders is errors and omissions (E & O). This protects the company by correcting any mistake that is made.
E & O insurance includes general business contracts, employee service agreements, crisis management, and assistance with court documents. Consider getting errors & omissions insurance for your business today.
Always Be Clear on the Change
Some insignificant changes may still be accepted if it doesn’t affect the terms and conditions of the overall contract. Still, you have to correct a mistake properly. You cannot just retype the whole document to show the new changes. You need to identify the original error and show the correction.
To do this, cross a neat line through the incorrect information. Proceed to write your initials and the date next to the correction, and when the change was made. The other person involved in the contract must agree to the change by signing and dating the change as well.
Contract errors are not uncommon. Even using the wrong year, tax information, or social security number can void the contract. Incorporate these tips for the next time you encounter a contract error.