Financing agreements can often be quite complex, even for seemingly straight-forward projects. They require a solid business plan as well as foresight into the future to anticipate any conflicts. In most cases a lawyer is required for help with drafting the contract, especially when considering financing a small business.
Finance agreements are not enforceable if they were created under circumstances of duress or fraud, or if they involve financing for an illegal project. If a finance agreement is breached, the non-breaching party may often file a lawsuit to obtain relief. Common remedies include a damages award to compensate for the injured party’s losses. Or, the court can sometimes allow the parties to rewrite or amend the contract in order to adjust to any new factors in the arrangement.
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