Contracts are a key requirement for any business for all kinds of dealings. Without a written agreement, a business may lose money by not being able to enforce the money or services that they are owed. This is especially important in a new industry like the hemp business, where things may be freewheeling.
Contracts Include the Terms of Agreements
A contract is the lifeblood of any business transaction. Each party agrees to do something. This is called consideration. The parties put together a document that memorializes their agreement and sets forth the terms that each person or business must follow. This is what a court will refer to when deciding a dispute between the parties. The usual rule is what is in the four corners of the document will control the transaction.
People and businesses will begin to have problems when things are not in writing. Oral contracts introduce more uncertainty into the equation because a party will need to prove that a contract existed in the first place before the terms can be proved.
Hemp Industry Participants Need Appropriate Contracts
In the Nevada hemp industry, there are reports that parties are struggling with finding the right type of contracts to memorialize their arrangements. The hemp industry is a volatile one, as growers and businesses have varying degrees of success. Profits can vary based on the year, and the general trend in prices is lower. At the same time, growers must pour thousands of dollars into each acre.
The unpredictable nature of the business means that participants need the highest degree of protection possible. That comes from the contract. Otherwise, businesses have an incentive to back away from the agreement and refuse to honor what they have promised because it is in their best interests. The fact that they sign a binding agreement means that they must go through with the agreement. If not, a business is at risk of suffering the costs of a breach, and they will have little recourse.
In addition, a business must have the right type of contract. This will keep them from having to pay a visit to a breach of contract attorney when the other party is refusing to live up to the terms of their agreement.