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Avoiding unenforceable contract provisions – Part I

On Behalf of | May 29, 2015 | Business Formation And Planning |

If you are a business owner or you are contemplating the process of starting your own business, you likely have some familiarity with contracts. As you are likely aware, contracts are meant to be legally binding documents. As a result, it is vitally important that contracts are drafted in specific ways, as certain missteps in the drafting process can render sections or the entirety of contracts unenforceable.

An attorney experienced in the area of business and commercial law can help you to ensure that the contracts you draft and the contracts you sign are properly executed and are ultimately enforceable. However, it can be beneficial for you to understand what kinds of common contract provisions are generally unenforceable so that you can be better prepared to alert your attorney when one of these provisions seems to have snuck its way into a business contract you may be affected by.

For example, some contracts that are placed in very fine print online are unenforceable. Non-disparagement clauses used by businesses who have no tolerance for poor customer reviews are sometimes inserted into the fine print of online contracts that directly affect consumers. While these provisions are understandable from a business perspective, they essentially violate consumers’ right to freedom of speech and are generally unenforceable. Some states have banned these clauses and the federal government is considering a similar ban. If a customer writes a scathing review that is not based in fact, you attorney may be able to aid you in removing that review through some other legal means.

Please check back next week as we will be continuing our discussion of this matter in a later post.

Source: Findlaw Free Enterprise, “5 Unenforceable Contract Provisions,” Christopher Coble, May 21, 2015