Before you began running a business, your agreements were probably made off of nothing more than some handshakes and vapors. You’ll know what I’m talking about if you ever uttered the words, “oh, they promised me XYZ” or “I gave them money, but it’s cool, they said they’ll give me back.”
But unless this is a written agreement and signed off on, nothing is in stone, and they can change their mind whenever they want and for anything they want. You may have even felt the pain that comes with a changed mind when those you trusted didn’t give what they promised or had you chasing after that money like Craig and Day-Day.
It should have made you realize that even in the minutiae of your life, having a contract does benefit you. And as a business owner, business contracts are even more essential.
When fully fleshed out, a written contract protects you and your business. However, if you’re unsure of what I’m talking about when I say fully fleshed, this blog is for you. Keep reading to learn the five key things you need to address in your contract to set clear expectations for your clients and secure written protection for your business.
Whether you’ve had or haven’t had one yet, trust me when I say that everyone will experience a client who seems like they came out of hell. They may start contacting you before the contract begins or reach out for revisions long after it ends. Avoid this by having a valid contract with clear terms of a beginning and end.
Whether it’s a quick loan agreement, you’re getting that whole $1500 upfront, or you’re spreading out payments over a delayed amount of time, you need to establish the payment terms. How are you getting the money, and when is the installment or full fee due? You don’t want to be like ODB out here with clients like, “hey, baby, I got ya money, don’t ya worry.” Nope. Tell them when to send you the money.
Whether intentional or not, clients love to scope creep and try to sneak in little extra projects. You feel like being kind, you do you. But if you want to stick to what was agreed on, you’ll want to clarify your services or goods. Are you selling pipe dreams? Are you teaching them how to two-step? Are you passing them your grandmama’s secret spaghetti recipe? Define it in the contract.
Oftentimes I see agreements that don’t have a name or address, and as a result, the issuing party doesn’t even know who they’re supposed to be talking to or who will be paying the bills. Trust me when I say this will come back to bite you, whether in the day-to-day or the bigger scheme of things. What happens if you can’t deliver a project on time? What happens if you have to cancel entirely? Who would you get in touch with to notify about anything? Do yourself a favor and include the basic information of a clear point of contact in your contract from the beginning.
The last but most important thing you’ll want to include in your contract is clear processes on what happens in the event of a dispute. No one wants this to happen, but unfortunately, it still does. Let’s say you and this person are no longer getting along. They don’t like you, you don’t like them, and now they haven’t paid you or given you what they said they would. What do you do? If you have a contract that doesn’t outline these terms, you’ll be calling me crying; I can tell you that.
To save yourself the tears, plan ahead by having clear terms in your contract of what happens in the event of a dispute. These terms can define where you would file if you have to go to litigation, where you would send your demand letter (which you would know, thanks to question #4), and whether or not you would give them the option to rectify the situation before it becomes elevated.
Having contracts in your small business is like your car insurance policy. You hope you don’t need it, but your damn sure happy to have it when something happens.
By incorporating the five key things above into the terms of the contract, you’ll strengthen your ability to give your clients clear expectations and secure your business’s protection.
Is legal jumbo not your cup of tea? It’s ours here at the Anderson Law Firm. If you’re ready to create contracts that secure your business and your effort, click here to schedule a consultation and find out how we can make contracts specific to the needs of your business!
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