If you want Unnecessary Risks in your Business, then stop reading this post.

My recent calls have helped me come to a conclusion.

People unnecessarily put themselves at risk by ignoring the steps they take to run a business.

Especially when they are running a business for the first time.

And this is even more true with the type of Contracts they use.

Generic, vague, not managing any expectations, and hardly protecting anyone in case of disputes.

And such mistakes make you face situations that cost time and money to fix.

So let me help you avoid these mistakes by taking 2 steps.

(1) Do Not Make Bold Claims

In the competitive industry of the IT sector, there's a tendency to make bold claims to win clients' trust and secure projects.

Such as promising a 100% refund or guaranteed results.

However, some of these assertions may not be entirely accurate and could be seen as misrepresentation.

To address this, Software Development Contracts often include "anti-reliance" provisions.

Basically, asserting that clients haven't relied on any pre-contract promises or representations.

The intent is to shield the agency from potential misrepresentation claims.

Yet, overly broad provisions, like general disclaimers, may not hold up legally.

Now, in order to successfully avoid accusations of providing false information...

Rules or provisions should explicitly deal with the supposed commitments and statements made.

The focus should always be on the subject matter in question.

(2) Do Not Ignore Liability Provisions

Another commonly misunderstood provision is "limitation of liability."

Contracts often include clauses limiting damages, excluding consequential damages, and setting a cap on direct damages.

But do you know when these limitations will NOT hold up in court?

When a client can prove that the agency intentionally or negligently misrepresented its capabilities or software.

Negligence could be shown by a chain of circumstances, e.g. frequent project delays.

Negligence might lead to punitive damages if the project lacked sufficient testing and performance checks.

Which resulted in harm to the customer.

Now to protect your business effectively, do this:

a) Have a contract that is specific and not overly broad.

Particularly regarding project scope, warranties, and liabilities.

b) Once the contract is negotiated, adhere strictly to its terms.

A single dissatisfied customer could potentially sue your business for damages, driving you out of business.

That's it.

Those are the 2 steps that you should always avoid taking in business.

Now I did take the example of Software Businesses, but the points can apply to any business out there.

For e.g., a marketing agency, or brand specialists.

And if you have not taken care of these points in your business, now is a good time to do it.

P.S. Do you also make bold claims about your business?

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