Contract law is at the heart of our legal system and serves as the foundation of our entire society. This is not an exageration. It’s a simple observation, one that too often goes unnoticed.
Most business owners know that a contract based only on a handshake and a promise is a recipe for disaster. For this reason, the business environment is full of agreements between companies and individuals.
To make sure your business is protected, here are my top 10 tips to keep in mind when closing the deal:
1. Never start working without a contract
He finally landed that long-sought client and is ready to get started on the project. It’s tempting to go ahead with a handshake, but it’s worth taking the time to get your client to sign a written contract. Have your lawyer draft or review the contract to make sure it is favorable to you. If things go wrong, you need to make sure that the relationship between you and the client is set out in a contract.
2. Think ahead and mitigate risk
Contracts are a strategic tool that companies use to safeguard their resources and manage risk. In business, you don’t want to trust that you’ll get paid, you want to be sure that you’ll get paid. Most people enter into business relationships with good intentions, but sometimes things go wrong. If a matter ends up in court, your contract can help ensure that the decision is in your favor.
3. Define the scope of work
You are likely to discuss a variety of projects, and the client’s wish list can grow quickly. When performing work, it helps to have a clearly defined scope of work. During the course of the relationship, if there is a misunderstanding about the results or the time a project was completed, you can easily refer to the written document and resolve the issue quickly.
4. Improve the sale of your Services
A written contract is not just a legal document, it can also be used as a marketing tool. It provides evidence to your client that you are in control and once the scope of work has been defined in writing, it could lead to the client expanding the services to be provided.
5. Take your time and negotiate
Decide which items are non-negotiable, but don’t budget on important things like (a) the work you do remains your job until the client pays you for it, (b) the client pays a completion fee if you finish the project without a good reason, and (c) limitation of your liability if something goes wrong with the project. The negotiation process makes it fair for both parties.
6. Include non-compete clauses
Companies often use contracts to enforce non-compete agreements, such as agency or franchise agreements. Non-compete agreements prohibit individuals or other companies from offering goods or services on the marketplace. These contracts create strategic relationships between two companies and allow them to provide unique goods or services to consumers.
7. Ensure the scope of variations
If your business practices change, or the project becomes totally different from how you started, or the market changes, after signing the contract, don’t be afraid to update the contract from time to time to reflect how you actually operate or to reflect the new direction. of the project. This keeps everyone on the same page and keeps you protected.
8. Consider new opportunities
Another up-sale opportunity occurs at the expiration of the contract. Before a project is complete, or shortly before a deal is finalized, meet with the client. Discuss opportunities for new projects and review the potential to expand your services for the next phase of work, now that initial results have been obtained.
9.Keep it confidential
Every business has information that it considers integral and invaluable to its success. Your agreement must contain mutual promises that each party will keep strictly confidential any business information of which it becomes aware while performing the contract.
10. Get insights from experts
Legal advice should be sought before entering into any binding contract. Small companies may be susceptible to larger companies taking advantage of the entrepreneur’s willingness to adapt. Contracts often include difficult legal terms, and lawyers can provide clear information about the terms and advise whether a business must agree to specific contract terms.
Contract types:
Terms and Conditions
Sale of goods/services
lease agreements
agency agreements
distribution agreements
franchise agreements
joint ventures
Partnership Agreements
Shareholders agreements
Intellectual property
Confidentiality agreements
Employment contracts