As a business owner, you should ensure that all agreements are in writing. This is important not just for issues relating to intellectual property but for all aspects of your business. Here are a few reasons why.
It eliminates incorrect assumptions.
Imagine you start a t-shirt business with a colleague. He creates the designs, and you handle operating and marketing. After a year, one particular shirt design has become so popular that a major clothing brand wants to buy the rights for hundreds of thousands of dollars.
You might assume that your partner will split the profits with you, but he doesn’t have to. As the artist who created the initial design, he can claim that he has the full copyright. You could end up with nothing, even though you spent hours and hours every week helping to make that design popular.
Drawing up a written contract when you form your business can prevent this type of situation from happening.
It makes them more legally enforceable.
Do agreements need to be in writing? No. You can have a verbal agreement with someone, and in many cases, these are legally binding.
Here is the problem: how exactly do you enforce a verbal agreement if you don’t have a record on what you agreed to?
Putting agreements down in writing makes enforcement a lot easier because courts have a clear, detailed record.
It may be legally required.
While some agreements can be verbal or otherwise, there are a number that the law requires to be written down. These include, but are not limited to:
- Real estate sales (and leases of more than a year)
- Contracts of more than one year
- Contracts worth more than a certain amount of money (it varies from state to state)
- Property transfers set to occur when the party performing the contract dies
- Assignments of patents, trademarks and copyrights
With written agreements governing how your business operates, you’ll be ready for whatever arises.