Small Business 101- Know The Importance of Maintaining Written Contracts

The useful part

If you own a business, you undoubtedly have several contractual relationships, whether these relationships have been documented in the form of an official contract or not. If your company leases any premises, ensure you keep records of the original lease agreement and all subsequent amendments. It would not be sufficient to only have a record of the most current lease amendment, if it does not include all the terms of the lease.

How it works

• The most important question is: do you have employment agreements in place with each employee that lay out the terms of their employment, such as their wages, benefits, working hours, paid time off,...
• Typically, a lease agreement may have several amendments, each addressing a different issue such as a change in the area of leased space, rent amount, landlord, lease term, etc.
• One would only be able to piece together the complete history of and current relationship between the company and the landlord if all the historical lease documents are available.
• If your company has employees, there are several factors to consider when it comes to their employment agreements.

Details worth keeping

Even if an employment agreement was entered into with the employee at some point in time, if the terms of their employment have since changed – maybe they have been promoted or have become eligible for a commission – such changes should be documented. This ensures that there is no room for any confusion or future complaints.