the importance of using client contracts in your business
Congratulations, you’ve landed a client. That’s great! Now, you have to make sure that they won’t sneak out the back door before paying you for your services and expertise. This can be accomplished by using a legal contract.
In this post we’ll be going over some simple solutions to common problems when drafting legal contracts. We’ll discuss tips and tricks for creating the perfect legal contract template to fit your needs as well as how to avoid common mistakes like spelling errors or unintentional double meanings in your writing style. So let’s get started!
contracts are a great way to insure your company and yourself from possible legal ramifications.
It’s no secret that contracts are a great way to insure your company and yourself from possible legal ramifications. If you don’t have a contract, then it’s possible for someone to sue you for millions just because they feel like it. Contracts also help make sure that both parties understand what they’re getting into before they decide to do business with each other. This can avoid misunderstandings and confusion that could lead to legal problems later on down the road.
So now that we’ve established how useful contracts are, let’s take a look at three simple solutions for creating them:
the contract should include certain fundamental points that are going to be common across all contracts for your business
If you’re just starting out as a freelancer, then one of the most important things you can do is draft up a contract for each and every client. While it may seem like an unnecessary step, a good contract will help ease the transition from working with clients on a handshake basis to signing off your work and getting paid in full.
Here are some fundamental elements that should be included in any legal client contract:
- The date of signing
- The name and address of both parties involved
- A project completion date (if applicable)
- Any payment deadlines or due dates (if applicable)
for myself, my contracts include the following key points:
Use clear language that doesn’t require an attorney to interpret
Include only the most essential terms and no more
Use plain English, not legalese (unless it’s a legal document)
Apply the Golden Rule: Do unto others as you would have them do unto you. If a client is unhappy about something, protect yourself by including it in your contract.
Make sure your contract reflects reality; if something happens that makes your contract obsolete or unenforceable, update it or change its terms to reflect current conditions.
-the date of the signing of the contract
The date of the signing of the contract should be clearly stated in the document. The reason for this becomes apparent when we reflect on what constitutes a legally binding agreement. In order to be considered valid, a contract must be signed by both parties and then delivered to them (or their representatives). If you think about it, though, that’s not always easy: how do you know when someone has received your signed contract?
It turns out that having a date on which both parties agreed to the terms is very important in determining whether or not they are legally bound by their signatures (and who will get paid if they don’t). Without such information, there can’t be any legal precedence or enforcement mechanisms put into place to enforce contracts—which means all those business deals may as well just be done without papers!
-the name and address of both parties involved in the contract
The first section of your contract should include the name and address of both parties involved in the contract. The company’s name goes first, followed by the person signing on behalf of the company (usually an officer). After that, you include all relevant contact information for each party: mailing address, fax number, email address, etc.
-the project’s completion date, if applicable
If your contract is for a specific project, include the project’s completion date. If it’s not for a specific project, but you’ve set a time limit for the work, include that deadline as well.
-any payment deadlines or due dates (if applicable)
Setting a payment deadline will help you know when you can expect your client to pay. This is important because it can help prevent non-paying clients from taking advantage of your services. If a deadline has not been set, there is no way for you to hold them accountable for their lack of payment.
Setting up a payment deadline also provides protection against late payments and allows you to make any necessary changes if they do not meet the requirements that were outlined in the contract. I can tell you from experience, set that payment deadline. There were too many times in the beginning of my freelance journey where the project got pushed back due to scope creep on the client side, and if I didn’t have my backup job, I wouldn’t have been able to feed my family. So set up those payment deadlines and plan ahead.
-the exact costs associated with the completion of the project
The exact costs associated with the completion of the project should be set out in detail. This will give your client a clear idea of what they are getting for their money, and will make sure you have a clear understanding of the project costs before you start.
Contracts must contain all relevant information about time frame and scope, as well as what is expected from both parties during this time, who is responsible for any equipment or materials required, and how disputes will be resolved. Make sure that there are no hidden fees or charges which may come up later on in the project; if there are any extras involved then it should all be included in the contract so that there are no surprises at all.
-the terms under which this contract may be terminated, if applicable –e.g., breach of contract, mutual agreement by both parties, etc.
You’ll want to include a section in your contract that outlines under what circumstances the agreement will be terminated. This could include breach of contract, mutual agreement by both parties, etc. You don’t necessarily have to specify these situations; however, if you fail to do so and one of them occurs anyway (e.g., breach), then the other party could argue that they never agreed to such terms and thus aren’t bound by them.
try to avoid using legalese in you contract because it can be confusing and make it difficult to read.
You don’t want to use legalese in your contract because it can be confusing and make it difficult to read. For example, instead of saying “You agree to pay us $35 per hour,” say:
“You will pay us $35 per hour.”
Also, avoid using legal terms that are not common to the average person. Don’t be afraid of using words like “you” and “we.”
Understand what client contracts are and what they should contain
You should understand what client contracts are and what they should contain.
A contract is a great way to insure your company and yourself from possible legal ramifications in case anything goes wrong during the course of a project. The contract should include certain fundamental points that are going to be common across all contracts for your business, such as:
Scope of work – who, what, when and where will be done
Compensation – how much money do you get? What if you don’t get paid? How much time have I invested into this project so far? Would you like fries with that? ‘Cause we got some really awesome fries here today!
resources that helped me get started
Before signing off, I wanted to leave you with resources I used during my freelance journey that helped me in getting started.
- Firstly, is Honeybook. Honeybook has tools for the Modern Creative Professional: Proposals, Contracts, Payments, and More. Manage projects, book clients, send invoices and get paid. This is what I used when first starting out as it had all these templates readily available. Being a reputable company, I knew those contracts would be legally sound which gave me peace of mind so I felt comfortable going into business with new clients.
- Next, the designer in me eventually wanted more customization as far as appearances go. I really wanted my whole client suite to have cohesive branding and a client portal to streamline the process from start to finish. Dubsado had all these features and more. On the downside, it while it did have templates to get you started, Dubsado is more technical and will take a bit more getting used to. Dubsado also didn’t have contracts built in for service providers which brings me to my last resource.
- The very best thing you can do for yourself is get a draft up of your contract requirements and work one on one with a lawyer that can draft up a legally sound contract specific to your business. I’ve been in the business for a while so I already knew someone that I wanted to work with based on their previous work and referrals. If you’re just getting started and looking for referrals, reach out to your peers. See if any of your mutuals have recommendations on who they’ve worked with. If you still can’t find anyone, go to your very best friend, Google. Make sure you’re reading up on those reviews and checking out their portfolio so you know you’ll be working with someone that fits your niche.
As you can see, there are many reasons why a contract is important. It’s important to have one in place before starting any project with a client so that everyone knows what they’re getting into and what the expectations are going forward. These simple steps will help ensure that your needs and wants are met while also keeping everyone safe from possible legal ramifications in the future!