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What's the best way to avoid contract litigation?

Contracts are designed to avoid problems, not create them. One careless agreement, however, can wrap your entire business in legal issues that you're far better off avoiding.

What are the best ways to avoid a contract fiasco? Don't sign anything until you review these tips:

1. Read the whole contract.

You've probably signed hundreds of contracts in your life without really reading them. After all, how many people have read the terms of service on every app they download to their phone?

When your business is on the line, it's not a good time to be trusting. No matter how much you like the other party or admire the attorney who drew up the paperwork, read through any contract you're about to sign carefully and make sure that you clearly understand all the terms.

2. Don't leave any blanks.

You wouldn't sign a blank check, would you? Don't put your signature on a contract with any blank spaces in it, either. Even if you trust the other party, wait until you have all the figures before you commit an agreement to paper. If there are blank spaces on the contract for any other reason, line through them so that nothing can be added later.

3. Learn how to cross out clauses.

A lot of contracts are pre-printed forms, so there may be clauses or conditions that don't apply to your situation. That's fine — as long as you cross them out before you sign. Otherwise, that clause that "doesn't matter" could come back to haunt you in court if there's a dispute.

4. Address the worst possibility.

What happens if the relationship between you and the other party sours? A good contract should address your escape plan, or the ways in which you can legally end the agreement. Make sure that you're okay with whatever those terms are, whether it's binding arbitration or something else.

The best way to avoid contract disputes and litigation is to always take your time before entering into a contractual agreement in the first place.

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