Learn how to avoid common contract mistakes with practical tips from Jill Jasperson, a business professor and small claims judge. Discover why written agreements, proper documentation, and understanding contract terms are essential for protecting yourself in any deal.
Ever run into trouble with a contract? Or worse: realized too late you didn’t have one?
As a business professor and part-time small claims judge, I see the same contract-related mistakes over and over. Whether you’re a student, entrepreneur, or seasoned professional, understanding the basics of contract law can save you time, money, and unnecessary stress.
Here are three real-life scenarios I’ve encountered in my courtroom, along with simple lessons to help you avoid common pitfalls:
It's tempting to skip formal agreements, especially when working with friends or acquaintances. But even with the best intentions, verbal agreements can lead to disputes.
Example: A woman hired a contractor to fix her late father’s motorhome. They agreed on an hourly rate verbally, but when deadlines were missed, she halted the project and sued for poor performance. The contractor, however, had kept meticulous records of his hours. Because there was a verbal agreement, I ruled in his favor.
Takeaway: Always put agreements in writing, even if it’s as simple as a text or email exchange. Documentation prevents misunderstandings.
A signed contract isn’t much use if you can’t find it when needed.
Example: A student tenant was unsure about their rights under a lease but didn’t have a copy of the agreement. They eventually retrieved it from their landlord’s online system, which resolved their concerns and clarified their responsibilities.
Takeaway: Always save a copy of every contract you sign. Whether digital or physical, having it accessible gives you peace of mind and a reference point in disputes.
With countless templates available online, it’s easy to copy and paste terms without fully understanding their implications. This approach can cause unexpected consequences.
Example: A landlord used an online template to draft a rental agreement but unknowingly included an arbitration clause. When a dispute arose, I had to dismiss the case because the arbitration clause meant it couldn’t be heard in court.
Takeaway: If you’re using a template, make sure you understand every clause. When in doubt, consult an expert to ensure the contract serves your needs.
Contracts don’t have to be intimidating. By following these simple principles, you can approach agreements with confidence and avoid common missteps.
