Anatomy of Healthcare Contracts: Pitfalls and Avoidance of Liability

Abstract

The purpose of a contract is to define role and responsibilities and to shift risk between parties. Contracts are legal documents written by attorneys on behalf of their clients and serve to bind parties into an agreement that is enforceable under the law. The clauses of a contract may be boilerplate or tailored to a specific client need or request. The writing, or the signing of a contract, should never be taken lightly. In general, almost any contract can be negotiated; however, the ability to negotiate a contract depends on the relative bargaining positions of the parties. Contract negotiation must occur before a contract is signed. Most contracts are signed and expire without any further need for legal interventional; however, in the case that one party would like to terminate the contract or fails to perform, there is a possible cause for breach, and breach gives rise to liability and litigation. In the event that a contract is litigated, the courts will generally presume that the contract was entered into voluntarily and that the terms and clauses within the written contract control.