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Recent Blog Posts
When entering contracts, small business owners often focus on the deal’s terms, payment, scope of work, and deadlines, while overlooking how the relationship can end. Yet, a clearly written termination clause is one of the most valuable tools a business can have. It provides a roadmap for how and when a contract can be ended, minimizing confusion and costly disputes. This article highlights the key features and benefits of strong termination provisions for small business owners. THE VALUE OF A WELL-DRAFTED TERMINATION CLAUSE A well-crafted termination clause sets expectations from the start. It outlines the conditions under which either party can exit the contract, such as nonpayment, breach, or prolonged nonperformance, thereby reducing uncertainty if problems arise. According to a 2024 report by the American Bar Association’s Business Law Section, contract disputes involving ambiguous termination language were nearly 30% more likely to result in litigation. Clear exit procedures, including defined notice periods and cure windows, allow parties to correct issues before escalation. For example, giving a vendor ten days to fix late deliveries before termination encourages resolution rather than immediate contract breakdown. AVOIDING ONE-SIDED TERMINATION RIGHTS Small businesses should be wary of “termination for convenience” clauses that grant only one party the right to end the contract at any time. While these provisions may seem flexible, they can expose small vendors or contractors to sudden loss of income. To balance risk, small businesses can negotiate reciprocal termination rights or require a notice period that gives them time to adjust operations. Most small businesses benefit from requiring at least 30 days notice to protect against abrupt termination and associated costs. MANAGING TERMINATION COSTS AND PENALTIES Another key consideration is whether the contract imposes termination fees, penalties, or obligations to refund deposits. For service providers, this can be a major financial risk. The Federal Trade Commission has noted that many disputes stem from unclear refund or fee provisions when services are canceled mid-term. To prevent disputes, contracts should specify how costs will be allocated, such as allowing retention of payment for work completed to date. A well-defined clause reduces post-termination arguments over what each side owes. DRAFTING FOR DIFFERENT RELATIONSHIPS Termination provisions should reflect the nature of the relationship. In long-term service contracts, flexibility may be important, while in project-based agreements, finality and deliverable-based triggers may be better suited. Some businesses include “termination for cause” (e.g., nonperformance or breach) and “termination for convenience” (mutual or limited) options to balance certainty with adaptability. Including a mediation or notice step before final termination can also preserve business relationships by encouraging good-faith communication first. CONCLUSION Termination clauses protect both parties by outlining a predictable and fair exit process. For small businesses, they help avoid unexpected losses and strengthen contractual stability. The best clauses are transparent, balanced, and tailored to the specific transaction. Taking the time to review termination terms, before signing, can save a business significant expense and frustration later. The SJS Law Firm, PLLC can help your small business draft, review, and negotiate termination provisions that protect their interests. For a consultation, contact us at (202) 505-5309. TERMINATION CLAUSE CHECKLIST FOR SMALL BUSINESS OWNERS When reviewing or drafting a termination clause, make sure it includes: Grounds for Termination: Clearly define when either party may terminate (e.g., breach, nonpayment, prolonged nonperformance). Notice Requirement: Specify how much notice must be given before termination (typically 10–30 days). Cure Period: Allow time for the other party to fix issues before termination takes effect. Termination for Convenience: If included, make it mutual or require reasonable notice to prevent unfair surprises. Payment Obligations: Clarify whether fees, deposits, or partial payments will be refunded or retained. Post-Termination Responsibilities: Outline what happens to outstanding work, materials, or confidential information. Dispute Resolution Step: Consider including a mediation or notice requirement before final termination. Source Notes: American Bar Association, 2024 Business Law Section Report on Contract Litigation ; Contract Termination Guidelines (2023) ; Federal Trade Commission, Common Contract Dispute Patterns in Service Industries (2024) .
Government contracts can represent tremendous opportunities for small businesses, steady revenue, prestige, and potential growth. But bidding on government work isn’t like doing business in the private sector. The rules are stricter, expectations are higher, and missteps can cost you the bid or even lead to legal trouble. Before you put pen to paper (or cursor to form), here are key legal considerations every small business needs to address. Register With the Proper Authorities & Get Your Identifiers in Place You can’t bid unless you’re properly registered. For federal contracts, that often means registering on SAM.gov (System for Award Management). There you’ll obtain your Unique Entity Identifier (UEI) , a 12-character alphanumeric code that uniquely identifies your entity. Without this, your bid may be disqualified up front. Determine your NAICS codes (North American Industry Classification System). These tell agencies what you do and how big your business can be (in terms of revenue or employees) for it to count as small. These registrations and codes are foundational. Understand Small Business Certifications & Set Aside Programs Because of programs run by the SBA (Small Business Administration), many government contracts are set aside exclusively for small businesses. There are also special programs like 8(a) (for socioeconomically disadvantaged businesses), HUBZone (businesses in historically under utilized zones), Women-Owned Small Business (WOSB), and service disabled veteran business status. If you qualify, getting certified under one or more programs can give you a competitive edge. Know What Types of Contracts You’ll Encounter Government contracts aren’t completely universal. Some of the common types include: Fixed Price Contracts : You agree to a price ahead of time, and regardless of actual costs, you deliver for that price. Cost Reimbursement Contracts : You can be reimbursed for allowable costs and then typically add a fee or profit. These carry much more risk but also more potential benefit. Indefinite Delivery / Indefinite Quantity (IDIQ), Time & Materials (T&M) , and others, each have unique risk/benefit profiles. Understanding which your business is best suited for (or is asked to bid on) matters for pricing, compliance, and accounting. Comply with Federal Acquisition Rules & Relevant Regulations The FAR (Federal Acquisition Regulation) system is what governs the federal contract bidding process. It contains rules on everything from how you must represent your business size, how you must treat subcontracting, to labor laws, small business programs, and more. Violating FAR regulations, even unintentionally, can lead to disqualification or worse. Also, stay current with procurement regulations and labor laws for the jurisdictions where the contract will be performed. If you do work in Washington D.C., Maryland, or Virginia (for example), you’ll need to cross check state and local procurement rules. Build a Strong Bid or Proposal Your technical proposal, pricing, deliverables, and compliance with RFP (Request for Proposal) instructions each matter heavily. A winning bid usually includes: A clean, well organized statement of qualifications References or past performance documentation showing you can deliver Realistic pricing that accounts for compliance costs, labor, insurance, and required overheads Proof that you meet all required certifications, registrations, and bonding or insurance mandates Skipping any required document or misunderstanding the RFP instructions is one of the fastest ways to have your bid rejected. In addition, small businesses should be ready to demonstrate financial responsibility, which often includes providing proof of how they handle payroll and vendor payments. Simple tools like business checks can help keep transactions professional, traceable, and aligned with the government’s preference for clear financial records. Stay Prepared After You Win Winning the contract is only half the battle. After the contract is won, there are legal obligations: performance standards, audit rights, submitting invoices properly, following security or data protection mandates, and ensuring any subcontractors follow required rules too. Contract non performance or regulatory non compliance can risk losing the contract or facing penalties. Government contracting can be a game changer for small businesses, but only if you come in prepared. Register properly, understand which programs and certifications apply to you, know the types of contracts, make sure your proposal is thorough and compliant, and be ready to meet all ongoing obligations if you win. When you approach the process with the right legal groundwork, the 101 stage becomes your solid foundation for success. Written by the staff writing team at HappyWriters.co
In today’s environment, data privacy and security are no longer just “nice to have”, they’re legal necessities. Small businesses too often assume they’re under the radar, but state and federal legal obligations, consumer expectations, and litigation risk make privacy a serious concern. Below is a checklist of legal and practical steps that every small business should consider to protect customer data, avoid regulatory penalties, and build trust. Determine Which Laws Apply to Your Business Different jurisdictions impose different requirements. Some laws to check for include: Federal laws like the FTC Act, HIPAA (for health data), GLBA (for financial institutions), and the Children’s Online Privacy Protection Act (COPPA). State privacy laws such as the California Consumer Privacy Act (CCPA), even if you don’t operate in California but collect data from residents there. Industry regulations that may overlap with federal and state frameworks. In Maryland, businesses must comply with the Maryland Personal Information Protection Act (PIPA), which requires prompt notification of residents if their personal data has been compromised. In Washington, D.C., companies handling consumer data must follow the Security Breach Notification Act, which sets strict timelines for notifying affected individuals after a data breach. Make a list of the laws you must follow based on where your business is, where your customers are, and what kinds of data you process. Audit What Personal Data You Collect, Store, and Share Understanding your data flows is fundamental. Questions to answer: Exactly what personal data do you collect? (Names, emails, addresses, geolocations, payment info, etc.) Where is it stored? On-site servers, cloud-storage, third-party vendors? Who has access, internally (employees) and externally (vendors, partners)? Why is each piece of data collected? Is it necessary? (Minimization principle.) Document this in writing. Data inventory is often required under privacy regimes. Build & Publish a Clear Privacy Policy Your privacy policy should accurately reflect your data practices. It needs to clearly cover: What personal data you collect and why How long you retain data, and when/how you delete it Who you share data with (vendors, partners) User rights (access, correction, deletion) under applicable laws Security measures in place to protect data If your policy is vague or doesn’t match what you actually do, it creates legal risk. Implement Secure Data Handling and Retention Practices Even with a policy, practice matters. Key elements include: Using encryption for data at rest and in transit (SSL/TLS) Strong password policies and multi factor authentication (MFA) for internal access Regularly training employees on data security and privacy awareness Limiting access to sensitive data to only those who need it Deleting or anonymizing personal data once its purpose is over Using management software that includes built in compliance and security features can also help small businesses streamline retention, access controls, and data deletion. Vendor & Third-Party Risk Management Often, small businesses outsource parts of their operations to CRM providers, payment processors and cloud services, but that doesn’t remove your legal obligations. You should: Vet vendors: check their security certifications, privacy practices, breach history Use written agreements: data processing agreements or vendor contracts that require vendor compliance with relevant laws and security measures Know where vendor-stored data resides physically and legally (especially relevant under state laws or international jurisdictions) Prepare for Consumer Rights & Data Subject Requests Many privacy laws give consumers rights such as: Requesting access to what data you hold on them Deleting or correcting data Opt-out of certain types of data sharing or sales Set up internal procedures so you can respond to these requests within required deadlines. Document every step to show compliance. Plan for Incidents & Breaches Even the best systems can be compromised. You should: Have an incident response plan: who does what, when, how to notify affected individuals Buy appropriate cyber liability or data breach insurance Maintain audit logs and monitor for unusual activity Know the legal requirement for breach notification: which laws require you to notify affected persons and authorities, and within what timeframe Maintain Ongoing Compliance & Review Privacy isn’t a one-time project. Laws change, your business changes. To stay compliant: Periodically review your data inventory, policies, and practices Stay updated on changes in relevant privacy laws (state, federal, international) Get external audits or legal review if possible For small businesses, investing time and resources in data privacy and security isn’t optional, it’s vital. Litigations, fines, and customer distrust can cost far more in the long run than the cost of implementing sound policies today. Use this checklist as your framework. When you build good practices from the beginning, you protect your business, your customers, and your reputation. Written by the staff writing team at HappyWriters.co
