An important component for any business is its contracts. While there are many different types of contracts that a business may rely on, they all have the same general goal. That goal is to outline the relationship and duties of the parties. Of course, creating and using contracts generally isn’t the highlight of owning and operating a business. Yet, it’s necessary. In this post, you’ll learn more about how investing in standardized contracts can be a cost-effective tool for your business.
What Is a Standardized Contract?
A standardized contract is also known as a contract template, or sometimes just a “base” detailing some of the more important terms and conditions under which the company operates, leaving flexibility for the remaining terms, helping to facilitate a wider application of the base. It is a contract designed to cover a specific subject, such as medical technology licensing or a sales contract and can be used more than once. Once the contractual basics are present in the contract, it can be edited for use as many times as you need it. Since the purpose behind standardization is to save money for your business, Larsen Law works closely with the business to help determine which contracts should be standardized, and in which specific areas, to maximize savings.
Standardized Contracts Help Businesses Save Time
In addition to being cost-effective, standardized contracts also help businesses save time for businesses operating in certain fields. Unlike individualized contracts, standardized contracts aren’t meant to be negotiated, often referred to as “take it or leave it” contracts, where the provision of goods or services offered does not vary between customers. Because there is no time spent negotiated, the contract administration process doesn’t take as long.
In other industries, the presentation of a standardized agreement may save time in negotiations as the opposing party is aware of your position from the onset. And while presented as “standard” in every instance, many terms remain open to negotiation to secure a beneficial transaction. Many companies utilize such a tool as a negotiation technique merely to be able to imply ‘concessions’ as talks continue.
While standardized contracts are helpful tools, they aren’t right for every situation. If you’re offering medical technology, there will be times when you need a medical technology attorney to draft and negotiate contracts that better reflect the relationship between the parties and the use of the technology.
You Become Better Acquainted with the Terms of the Contract
Standardized terms can also be useful in reinforcing your company’s policies and procedures, both internally and externally, since it is a document that will be used over and over again. Both you and those you do business with can become better acquainted with the terms under which you are willing to conduct business. This could make it easier for you, and your sales personnel out in the field, to answer basic questions, or address potential deal terms, about the arrangement that are asked by the other party.
A Standardized Contract Favors Your Business
The intention of a standardized contract isn’t to take advantage of the other party. In fact, if you want to create a successful business, it’s crucial to create win-win situations as often as possible. The creation of your standardized terms, drafted specifically for you, by your advocate at Larsen Law, can address past customer lessons-learned, push-back, invoicing and payment matters, realign your company’s customer services, and address a host of other concerns, taking strain off of other internal company functions, used to streamline various actions. Since the contract is created specifically for your business, the terms within it are determined by you.
Standardized Contracts Help Create Consistency Within Your Business
Much like how policies and procedures help create consistency in how your business operates, standardized contracts create consistency as well. The contract explains the duties of both parties. Your business knows exactly what is required and how it should be provided. It’s less likely that services will be provided to various clients by various methods.
Creating a Standardized Template Library
Depending on exactly what your business offers, you may need more than one standardized contract for future use. You can create a standardized template library for use by your business. Your standardized contracts can be stored on a physical server or on a cloud server. They can be organized by type. For example, medical technology sales contracts could all be grouped together. It would be important to ensure that the title of each file includes the name of the medical technology it covers. You can also create libraries for Services Agreements, End User Agreements, by product line(s), etc.
Standardized contracts could also be stored in contract repositories that allow the administration of the contract to be fully digital. This sort of technology is useful because you can fully monitor the contract from the time it is sent to the client, to the time it is signed, and when it is time to cancel or renew the contract.
Standardized Contracts Can Be Refined Over Time
Standardized contracts are tools for your business. Over time, your business may change, you may have new products or services to offer, your clients may have new needs, or there may be new technology that demands change. As you use the contracts over time, you may discover that they need to be refined to better meet the needs of your clients and to better reflect the scope of what your business provides. Since your standardized contract will have specific, standard clauses, it may take less time and be less expensive to use the current version as a reference tool to create a new contract. Of course, if the changes aren’t substantial, you may be able to make small changes to the existing standardized agreement.
Contract Drafting and Negotiation: When Is It Needed?
So now that you understand how beneficial standardized contracts can be, let’s answer an important question. When is contract drafting and negotiation necessary? There is no one answer to this question. Overall, the answer is when a standardized contract won’t work. As a medical technology attorney, contract drafting and negotiation may be necessary to create more favorable terms for either your own business or for the other party. It’s a workflow that you engage in to create a mutually beneficial relationship.
Need to Create Standardized Contracts for Your Business?
If you’re considering the creation of standardized contracts for your business, Larsen Law is here to help. With more than 30 years of contract drafting and negotiation experience, Susan Larsen is a medical technology attorney who can help you with your contract needs. To discuss the contract needs of your business, call Larsen Law at 303-520-6030. We’re here to help!