5 Contract Clauses Every Utah Small Business Should Never Overlook
As a small or medium-sized business owner in Utah, you wear many hats. From sales and marketing to operations and customer service, every day brings new challenges and opportunities. Amidst this whirlwind, one area that often gets overlooked until a problem arises is the backbone of nearly every business relationship: your contracts.
At Loubet Law, we believe in providing practical, outcomes-driven legal solutions. That means helping you understand the essential elements that protect your interests, ensure clarity, and set your business up for success. While every contract is unique, there are five key clauses that every Utah small business should pay close attention to.1. The Clearly Defined Scope of Work/Services Clause
Ambiguity is the enemy of a good contract. This clause outlines exactly what services or products will be provided, the deliverables, timelines, and any limitations. For Utah businesses, this means specifying details like project milestones, product specifications, and service expectations.
Why it matters for you: Without a clear scope, projects can expand, expectations can diverge, and disputes can arise over what was – or wasn't – agreed upon. A well-defined scope protects both parties and ensures everyone is on the same page from the start.2. Payment Terms and Conditions Clause
This might seem obvious, but unclear payment terms are a common source of friction. This clause should detail the total cost, payment schedule (e.g., upfront, milestones, net 30), acceptable payment methods, and consequences for late payments (like late fees or interest).
Why it matters for you: For Utah businesses, consistent cash flow is crucial. Clear payment terms minimize misunderstandings, encourage timely payments, and provide legal recourse if payments become delinquent. It's about ensuring you get paid for your hard work.3. Limitation of Liability Clause
No business wants to imagine things going wrong, but a well-drafted contract anticipates potential issues. A limitation of liability clause caps the amount of damages one party can claim from the other in the event of a breach or negligence. This can protect your business from excessive financial exposure.
Why it matters for you: Especially for small businesses, a single large claim can be devastating. This clause helps manage risk and provides a degree of financial predictability, allowing you to focus on growth rather than crippling lawsuits.4. Dispute Resolution Clause
When disagreements happen, how will they be resolved? This clause outlines the process for handling disputes, often starting with negotiation, then potentially moving to mediation or arbitration before litigation. Many Utah small businesses find mediation and arbitration to be more cost-effective and efficient than court.
Why it matters for you: Going to court can be lengthy, expensive, and damaging to business relationships. By agreeing on a dispute resolution process upfront, you can save significant time and money, and often preserve a working relationship, even after a disagreement.5. Governing Law and Venue Clause
This clause specifies which state's laws will govern the contract and where any legal disputes would be heard. For a Utah small business, it's almost always in your best interest to have Utah law apply and for the venue to be within Utah, ideally Salt Lake County.
Why it matters for you: Imagine signing a contract with a company based in another state, only to find yourself needing to travel there and understand their state's laws if a dispute arises. This clause ensures any legal actions are handled in a jurisdiction convenient and familiar to your business.
Crafting solid contracts is a proactive step that protects your business, fosters clear communication, and ultimately helps you achieve your goals. Don't leave these vital protections to chance.
At Loubet Law, we offer predictable costs and practical guidance on all aspects of business contracts, from review to drafting and dispute resolution.
