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Despite contracts and business agreements being a pillar of economic activity in Los Angeles and elsewhere throughout California and the rest of the country, it is fairly common for business owners and managers to make glaring mistakes when drafting, considering, or approving a business contract. The result? Serious legal and financial ramifications that could effectively ruin the business.

Below are three mistakes routinely committed by business owners and managers when creating a business contract and advice on how to prevent such oversights.

  1. Relying on Cookie Cutter Contract Forms

    Relying on a cookie cutter business contract you found online is a recipe for disaster. Why? Because business contracts need to be tailored to meet the specific needs and requirements of your venture or situation. In addition, a business contract needs to adhere to the rules and regulations of your respective locality. State laws are not uniform and actually vary quite dramatically from state to state. Customizing a business contract is extremely important to ensure it is valid and will hold up in court in your respective jurisdiction.

  2. Failing to Include the Recitals

    You may be asking yourself, “what are recitals?” Well, legally speaking, it is a preamble to a contractual agreement. The recitals provide a general overview of the following:

    • Who the parties are;
    • What the contract is about; and
    • why the parties are signing the contract.

    Often overlooked during the contract drafting and negotiation phases, when a dispute arises over contractual interpretation, the court or arbitrator may use the recitals as an aid to interpret the contract.

    An important tip is to ensure you invest the time to focus on the operative provisions of the commercial contract, but do not forget to set the scene and provide the reader of the contract with background information.

  3. Using Clauses Improperly or Incorrectly
    Many people, including business owners, often overlook or outright ignore so-called“boilerplate” language (i.e., generic, fairly standard contractual provisions) contained within a business contract. This is a big mistake because ignoring the boilerplate provisions can really be problematic when a dispute arises. These include governing law and venue, arbitration provisions, how the contract can be amended, and whether a prevailing party should be entitled to attorneys’ fee in the event of dispute.

Have Questions Contact an Experienced Business Lawyer in Los Angeles with the Hakim Law Group

If you need help drafting a business contract or agreement, the Hakim Law Group is here to help.When you hire a business lawyer in Los Angeles with our firm,you are getting a knowledgeable and skilled advisor who can help throughout the drafting process. Our goal is to help you meet your goals in the most efficient, responsive, and effective way possible. We make it a priority to understand our client’s business and interests and work to achieve the desired results as expeditiously as possible. With many years of experience as lawyers and former executives, we bring an insider’s perspective and a sophisticated approach to create nimble, innovative solutions for our clients. Contact us today.

Have Questions About Drafting a Professional Business Contract? Contact an Experienced Business Lawyer in Los Angeles Today

Hakim Law Group stands ready to help small business owners and entrepreneurs. Our team of skilled and highly reputable business attorneys have worked in top tier international law firms and served as general counsel to major companies. This high level of diverse legal and business experience is paramount to our boutique approach – which produces more efficient, responsive and, ultimately, more effective results. For further information or to schedule an appointment with a leading business attorney in Los Angeles please contact HLG at 310.993.2203 or visit to learn more.