How to Make a Contract for a Bar

A good legal contract is essential for any business, including a bar.

Many people dream of owning a bar. Who wouldn't want to own the place where everyone knows your name? Whether you're a retired baseball player or an animated character named Moe, owning a bar will necessarily require drafting, arguing over, and signing contracts. Contract law is one of the most complex and dynamic areas of law practice. New rules pop up on an almost daily basis and old rules are set in granite; woe to the person who forgets a necessary clause.

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Instructions

- 1
  
  Make sure that the parties to the contract are the appropriate parties to make the decisions. Does the old owner actually own the business, the property or the name of the bar? Do research on the business through the secretary of state to ensure the appropriate parties are involved in the contract.
- 2
  
  Secure the name of the establishment. If the bar being purchased is called Kelly's Bar and a Mike is buying it, the name of the establishment may not be very important to the new bar owner. However, if the establishment's name is location specific or has a particular good will established in the community, the name becomes of prime importance. Ensure the contract spells out that the name and good will identified with that name is transferred with the actual business.
- 3
  
  Secure the location. The not so very secret to any good business is location, location, location. What many people do not understand is that there may be separate owners for the business and the property the business is situated on. Make sure that the contract is contingent upon approval of the property owner. Generally, a separate contract for the lease will be required.
- 4
  
  Secure indemnification from previous owners. Running a bar is fraught with perils and expenses. There are federal taxes, state taxes, local taxes, liquor taxes, ASCAP fees, liquor control board fees and fines. Also, the list of possible lawsuits against a bar owner can go on and on. When purchasing a bar, make sure that the old owner is willing to indemnify the new owners. An indemnification clause requires that the old owner be present to defend at any lawsuits or hearings that occurred during their ownership and requires that the old owner pay for any damages, fines or court fees that were created during their tenure.
- 5
  
  Hire an attorney. Contract law has been evolving for thousands of years. No amount of preparation can replace an experienced contract attorney in drafting and executing a business contract.