Your startup may be a young company still growing and finding its feet but as a business owner you intend to turn it into a thriving, sustainable entity.

You’re selling your goods or services to make a profit and as you expand, your startup could incorporate more employees, potential business partners and extra funding.

Hiring the services of contract lawyers Melbourne businesses use could be one of the best decisions you ever make. Why? Contracts become essential requirements and are necessary for startup risk management strategies. For example, as you deal with more and more third parties, you’ll need legal advice and protection from risks that could ruin your startup.

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What is the Role of a Contract Lawyer?

A contract lawyer specialises in contractual disputes as well as reviewing or drafting contracts between individuals and organisations. Contract lawyers help clients negotiate agreements and assist them with contractual claims for:

Damages and breach of contracts
Performance
Rectification of contracts

Your contract lawyer will advise whether it’s worth pursuing a litigation case or if mediation is the better approach. They’ll assist in the interpretation of contracts and ensure that all parties involved clearly understand their obligations.

Not sure if it’s relevant to your business? Let’s discuss some specifics.

4 Scenarios Where You Need a Contract Lawyer for Your Startup

1. Founders’ Agreement

Many startups come about because a group of people developed a business idea that they felt was worth selling. Setting up a startup with the co-founders means having a legal contract or agreement in place that governs each person’s relationship with the company.

A Founders’ Agreement stipulates the roles and responsibilities of each founder. A contract lawyer can draw up a legal contract to include the following aspects:

The co-founders’ liabilities and obligations to the startup.
Each founder’s rights and rewards in the business.
Commitments such as how much time, capital or assets each founder gives to the startup.

A well-drafted Founders’ Agreement helps to mitigate disputes and settlements that could be the downfall of your startup. It allows you to set up a robust management system among the co-founders that support the growth of your brand.

2. Employee Contracts

Even if you’re only employing one person, it makes good legal sense to have an employee contract in place. Drafting an employment contract with a lawyer before hiring staff helps to clearly outline your employee’s duties and reduces the risk of misunderstandings while they’re working for you.

An employee contract should include:

Working hours and overtime
Vacation time
Compensation
Grounds for termination
Roles and responsibilities
Dress code

Contract lawyers ensure that the right employment terms are used in the contractual document and they can assist you in drafting offer letters as well.

3. Intellectual Property Agreements

Protecting your intellectual property (IP) is vital for growth and success. You need to protect yourself and the brand against other businesses or individuals copying your patent or claiming your business model as their own. There are different IP agreements and a contract lawyer who specialises in this field can assist you in drafting the best document for your specific needs.

In Australia, IP laws encourage the innovation and development of startups and other businesses while protecting the original intellectual property. A lawyer will draw up your contract keeping these laws in mind so that you’re protected from third parties claiming your ideas.

The lawyer will advise on IP that needs to be registered as well as the execution of non-disclosure agreements if necessary. Handing over intellectual property to an organisation is essential for the growth of the startup and a lawyer will facilitate the transfer of ownership with an appropriate IP agreement.

4. Terms of Use Agreements (Websites)

Most startups use a website to promote and sell their products or services. A Terms of Use Agreement becomes important to regulate relationships between your company and customers using your website. It should be displayed on your website to prevent users from claiming ignorance.

Your website’s Terms of Use Agreement can include provisions such as:

Disclaimers
Restrictions when using the website
Liability limits
Disclosure of privacy information
Copyright warnings

A well-written Terms of Use Agreement protects the website owner from expensive claims that could force the closure of your business. Your lawyer can assure that you include all provisions using the right terminology to protect you and your startup.

Final Thoughts

The legal obligations of running a startup can be overwhelming but getting support from a contract lawyer will ensure you’re covered when it comes to dealing with third parties. In terms of ensuring the success of your young business, having a contract lawyer on your side protects you and your startup from potential risks.

You could also use the services of commercial litigation lawyers Melbourne companies use for dispute resolution. Hopefully, it never comes to that—especially if you have your contracts in order!