Spring Cleaning for Your Business

It’s time for Spring cleaning… But let’s make it legal!

We’ve all know about the idea of Spring cleaning. It’s the time of year when you set time aside—maybe even a long weekend—to do a complete cleaning of your home after the long winter. The weather is getting nicer, so you can open some windows and let in some fresh air… Your house has been closed up all winter, and with the arrival of Spring, it’s time to throw open the doors and windows and clean it spick and span.

While we all can use some Spring cleaning at home, we also suggest you also perform the same in your business. No, not sweeping the floors and wiping the windows – although that never hurts, but rather dusting off your contracts, refreshing your employment policies, and tidying up your business documents. A little legal Spring cleaning today can help you avoid some major headaches tomorrow!

Let’s look at what “Spring cleaning” in your business might entail:

What Needs Spring Cleaning in My Business?

Chances are that you’ve been busy operating your business non-stop every day, working hard to make it profitable. You wouldn’t be the first person who’s signed a contract or approved a policy and then filed it away. In fact, you most likely have a file or database with contracts with customers, employees, and vendors, and maybe an employee handbook from the (first) Bush Administration! You need those documents because they state how your business will work with others. No matter what industry you’re in, these documents aren’t static—they must be updated as necessary and here are some reasons why:

1. Legislative Changes. This is the process of modifying, repealing, or enacting laws by state, federal, and local government. For example, New York State recently enacted the first-in-the-nation Paid Prenatal Leave Law. This will impact your business and your employees, requiring updates to company policies and procedures.
2. Workplace Policies. Perhaps you’ve added a remote worker policy – or cancelled one. You will need to update your employment polices and your employee handbook.
3. Change of Leadership, Ownership, or Internal Company Changes. Mergers, acquisitions, or changes in strategy can greatly affect your operation. As a result, it's critical to update your business documents to reflect these new realities.
4. Negotiating Better Terms. You probably own a cellphone, right? Of course, you do. And you’ve probably seen the hundreds of ads asking you to switch to another service. Usually, this pitch comes with reimbursement for your remaining phone balance and early termination fees (for your contract with your existing carrier). The same concept might apply with the company that wants to provide janitorial services for your office or website design for your website. There’s always another company that says it can do it better and for less. Conversely, a customer may come to you and tell you that your competitor is offering them a better deal. You may need to tear up the existing contract you have with them and negotiate different terms. 
5. Performance Issues. An agreement with a vendor may not be working for you. Perhaps they can’t keep up with the demand, or you need more notice to comply with your obligations under the agreement. The contract may need to be tweaked if one party isn’t meeting the terms.
6. You’ve Made Updates to Your Products. Perhaps your business is automotive repair, and in this year, you’ve decided to add glass replacement services to your menu for customers. There will be new contracts to be signed with vendors, but also changes will be needed for your customer service agreements. 
7. Market Conditions. These conditions does remain static. An economic recession, the COVID-19 pandemic, and the impact of different presidential administration may require you to revise your contracts to keep up with the new economic landscape.
8. Better Risk Mitigation. Updating this part of a contract involves reviewing contract clauses such as the Indemnification Clause that states the extent to which you’re required to compensate an indemnified party, such as a customer or third-party provider. This is a risk allocation that lets you change the amount of risk they’re willing to accept, protect your company litigation, and hold the other party accountable if something goes wrong. There’s also the Limitations of Liability Clause that limits the amount your company must pay to the other party if they incur a loss because of the business contract. This also limits the types of compensation they can recover and typically covers losses caused by negligence, breach of contract, infringement of intellectual property rights, or misrepresentation.

This list isn’t all-inclusive. There may be a variety of reasons why you need to update a contract. Be sure that your contracts are still relevant, effective, and reflective of your business’s changing needs as well as market conditions, innovations, and customer needs.

Let’s Clean Up Those Contracts—No Broom Required!

Out with the old, in with the up-to-date! 

LOVE LAW FIRM is here to review, update, and streamline your legal paperwork so your business stays protected and running smoothly. Call us at 516.697.4828 to schedule your free consultation or go to our website to learn more about what we can do to help your business succeed.

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Francine E. Love is the Founder & Managing Attorney at LOVE LAW FIRM PLLC which dedicates its practice to serving entrepreneurs, start-ups and small businesses. The opinions expressed are those of the author. This article is for general information purposes and is not intended to be and should not be taken as legal advice.