Are Your Contracts Bulletproof? Maybe Not.
Most CEOs think their contracts are airtight—until the other side decides to challenge them.
Remember when we talked about contracts being like seat belts? You don’t know how secure they are until something happens. The strength of your contract can be tested by something as small as a misplaced comma, an unclear clause, or an unwritten understanding that you assumed was "understood." Maybe you provided an extra benefit after signing but never updated the contract to reflect that. These small missteps can turn into big problems.
Let me tell you about Mr. and Mrs. Tate.
They were in their 70s when they came to me. They co-owned a home healthcare business with three others. A partnership dispute erupted, leading to litigation. The Tates agreed to cover a friend’s legal fees with the understanding that she would reimburse them under certain conditions.
When the case was over, the Tates asked for their money back. Their friend refused. We sent a demand letter. Nothing. So, we went hardball and filed a lawsuit.
Here’s what we uncovered:
1️⃣ The contract’s language was ambiguous.
2️⃣ Improper punctuation changed key meanings.
3️⃣ Their friend suddenly had “no idea” what they were referring to.
The agreement stated the friend would reimburse the Tates from a personal injury settlement or from her estate (or her husband's) upon death. But there was more—this same friend had also entered another business venture with the Tates, and she owed them for expenses tied to that as well.
The problem? The contract’s wording was so unclear that it seemed like the mortgage the Tates took out to cover litigation costs was tied to this new business instead of their home. That confusion cost them money.
Even though we won the contract jury trial and got them nearly $40,000, they still lost out on $20,000 because of those drafting mistakes.
Here’s What You Can Do Right Now to Protect Yourself
🚩 Step 1: Get a Legal Review. If an attorney didn’t draft your contract, have one review it ASAP to ensure it accurately reflects your understanding.
🚩 Step 2: Update the Terms. If you’re doing more than what’s in the agreement, put it in writing. A handshake won’t hold up in court.
🚩 Step 3: Conduct Regular Checkups. Your contract isn’t a “set it and forget it” document. Review it periodically to make sure it still aligns with your business and expectations. If something changes, amend it—before it becomes a problem.
You don’t want to find out your contract has holes when you’re already in a fight. Get ahead of the problem now.
Need a second set of eyes on your agreements? Let’s talk.
Want to make sure your contracts are as bulletproof as your vision? Let’s chat. Click here to schedule a complimentary call or download my free guide, The CEO's Guide to Litigation-Proofing Your Billion-Dollar Business, to learn more about protecting your empire.
ABOUT THE AUTHOR:
Attorney Sivonnia DeBarros, is the founder of SL DeBarros Law Firm, LLC, and supports high-net-worth companies and entrepreneurs helping them to maximize their intellectual property, protect their assets through contracts and litigation, and generate growth leading to sustainable legacies. DeBarros has been featured in media outlets like CBS, ABC, TNT, and Forbes to name a few.
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