A contract is a simple concept and it may be a simple document. Sometimes, it can be a very complex document. A contract allows two or more parties to come to a “meeting of the minds” that sets their expectations for the future. With a simple transaction, you may be able to draft a document that contains all of the legal requirements for the deal on a single page.
In fact, in some circumstances a contract does not even need to be written, and can consist of an oral agreement. Of course, this can be risky, should anything go wrong during the performance of the contract. In Michigan, there is a “statute of frauds” that details which type of contract needs to be in writing.
And typically, you want a contract in writing, as the contract “memorializes” the agreement, and can be thought of as a roadmap for the continuing relations between the parties.
In business, relationships are important, and ensuring your contracts mean what you believe them to say is important, as the accurate setting of expectations of performance can help protect the parties from misunderstandings that can occur when imprecise or ambiguous terms are used.
You do not what to be trying to figure out three years after the signing of an agreement what some clause in a distribution or development contract means, and scrambling to determine if you have a viable remedy.
Because time is always money, the expense of due diligence during the drafting of contracts can more than pay for itself in preventing expensive litigation and project delays during the life of that contract.