The early days of a new business can feel like an incredibly vulnerable time. Without solid business contracts in place, any verbal agreements and handshake deals could fall apart at any moment.
Understanding the Terms and Conditions
Contacts are used whenever an agreement needs to be legally binding. It’s widely agreed that payment for services is the most common use, but others include employment contracts guaranteeing your relationship with a company lasts a specific duration and non-disclosure agreements. Legal professionals should be consulted to guarantee the contract you build is enforceable.
These documents set a series of expectations between the two parties as well as contingencies that go into play whenever a party breaches its end. For example, a handyman may agree to complete the installation of a new appliance in a set amount of time for a set price. In the event his project runs long, there may be clauses in the contract dictating that the expected price is now lower. Without clear written directives for either of the parties involved, proof that work or payment is owed is difficult if not impossible to prove in court. There is little in place to stop a contractor from taking payment for a job and then electing not to complete the work if no agreement was signed.
Being aware of your company’s fiscal wellbeing is vital before signing any contract that comes your way. A poorly worded contract can leave you open to scams, so read the fine print carefully, and consult a professional when possible to be sure. It’s not a bad idea to get yourself out of any lingering business debt before entering into a new contract that costs your business. Keep one eye on your financial health to know what you can afford to lose and what you need to gain from any new deal.
Negotiating Contracts
Before negotiations begin, you should do what you can to prepare. Research the other party involved as rigorously as possible. You’ll find what they may seek to gain from a contract, which you can use to broker a better deal for yourself. You may also find insight on what they can afford to send your way, as well as common tactics they may have used on contract negotiations in the past. This education will make for not only a stronger contract overall but will protect you from any predatory tactics the other organization may be known for.
When finally at the negotiation table, each party should go over the document line by line and call out any clauses which seem unfair, unclear, or untenable. A good contract is mutually beneficial and encourages further business together in the future. While it may be tempting to take all you can while giving as little as possible back, this is unlikely to garner a lasting working relationship.
Once the agreement is hashed out, creating and distributing it online is a breeze with the use of widely-available free tools. Documents can be uploaded to the cloud to be easily shared and referenced for the duration of the contract’s effect and beyond. Contracts can even be altered after their initial signing, provided every involved party agrees to the modifications.
Business contracts are vital to keeping you protected when working with others. Diligence and research will help you make the contract that benefits you and your collaborators the most.
Texts by Cody McBride
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