Contract Drafting & Review
What is a Contract?
Simply put, a contract is a "written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law."* But, if you look it up in a legal dictionary, or ask a lawyer for a comprehensive definition, it will get a lot more complicated. And, there's a good reason for that.
Contracts can sometimes appear to be simple on the surface. And, you might be tempted to think that they are. But, if you are in a situation that merits a contract, then isn't it best to work with a professional to make sure the contract really does what you need it to do? And, many times, it is very obvious that a contract is far more complicated than you might wish it to be. If you want to conduct business with someone it is a means of a formal agreement regarding what is expected and promised by each party involved. * dictionary.com
8 Situations that Need A Contract
1. Anytime there is a lot on the line. Are you paying big cash for products or services? Need something done by a certain date? Need to make sure work is done properly or that you will be fairly compensated for work you've done? If the answer is yes, then a contract is in your best interest. A contract can help insure that your investment of time, finances, or products will be protected and will achieve the result you desire and have planned for.
2. When you don't know the other party well. We all like to think that everyone is as trustworthy as we are, but the sad truth is that it isn't so. Don't know sometimes if we hire someone to do the work that they will follow through. Put it in writing so you have something to work in your favor if the other party lets you down.
3. When you do know the other party well. Contracts can also help when you do work with someone you know to be reliable and trustworthy. Contracts can serve as a clear and precise agreement to insure that both parties are on the same page when it comes to the big details. You won't have to wonder if they really agreed to finish the job by a certain date. Do we agree what will happen if the situation changes? A contract has provided both parties with the means to consider all contingencies, make sure they agree with how to handle them. And it is in writing.
4. When you want to back up your reputation. Customers, employers, contractors, employees who are investing their cash, time or products want some evidence of your reliability. A contract shows them that they can trust that you will do what you've promised.
5. When you need to set boundaries on liabilities - Life happens. If one party is not able to fulfill their agreement, a contract can limit your exposure by clearly defining appropriate consequences in the beginning of the working relationship. If the provider misses a critical deadline will they be required to give a cash fee, a percentage discount or provide all services at no cost? This can be clearly established by both parties before you agree to do business. It is even more important if you are the party who can't meet the terms because of some unforeseen circumstance. Determining consequences after things have not gone well is not likely to go smoothly. Set them in the beginning when cooler heads prevail so your liabilities are limited to a pre-defined and pre-agreed to amounts.
6. When you want to avoid going to Court. That sounds backwards, right? But, a contract isn't setting the stage for a legal dispute. It is the tool to help you avoid a legal dispute. If both parties know what is expected and the consequences if they don't meet the terms, then they are more likely to comply with the agreement. Yes, the contract is a vital piece of protection for you should things need to go to Court, but the contract itself will make it less likely that litigation will be necessary.
7. When you want to get it done - Of course we all want to do business with people and companies who do what they've promised to do, but in the event that they are faced with a tough situation, having a contract may put you to the top of their priority list to get things done so they can avoid pre-set consequences.
8. When you are looking to your future - Using contracts to conduct business is a professional and efficient way to get deals done. They will help build your business because they will help business get done the way your customers want it to get done.