How To Create and Negotiate Contracts For Your Business
A contract is a legal agreement between two parties. The agreement will be legally enforceable in most places as long as it covers several criteria, such as a legal offer being made and accepted, the scope of the work and dollar amount, and the capacity of the parties to fulfill the agreement.
This article is about making your own contract or negotiating elements into another party’s contract. Make sure you consult your attorney before entering into legal agreements.
Why Contracts Are Important
Contracts spell out relevant parties in a transaction, important dates — such as deadlines or termination dates — and how much money is involved, such as rent or other considerations.
If you're offering a product or service, and a client agrees to your contract, you have an extra layer of protection when things go wrong. For example, you can point to a specific part of the contract, such as the price of the service or when the work will be completed.
How To Negotiate Contracts
Another party may ask you to sign their already-made contract. They may use a template and fill in names, dates, and specific scopes. This doesn’t mean the contract is set in stone and you can always ask for things to be changed. Make sure you find the right person to negotiate with. Research the other party, and know their motives. Keep everything confidential and don't rush. Try to negotiate terms as favorable to your business as possible.
What To Include in Your Contracts
You can also make your own contracts. Some things to include in the contract are:
Names. Spaces for the names of all parties involved.
Dates. Don’t just list the date of the contract. Specify when the work will be done or when the contract terminates.
Scope. Be very specific about what you're offering. If it’s a service, spell exactly what will be done; if it’s a product, describe the product and everything included.
Relevant clauses. Every business is different, and every contract is unique. Be sure to include clauses that pertain to the agreement, such as rights and obligations, dispute resolution, and termination.
When making your contracts, eventually you’ll need the other party to agree and sign. One way to do that is to create your contracts as printable PDF files. There are tools you can use to be able to easily present, edit, or modify elements of a document or take an existing document and make a new PDF. If you have a contract document already and would like to use just a specific section of it, try an online tool to extract PDF pages in order to keep the relevant parts and make a new PDF.
Stay on Top of Research
Understanding contracts is just one part of running a successful business. In addition to writing and negotiating contracts, you need to know how to enforce them and where to look if things go awry. Research solutions and seek help when needed. Visit your local chamber of commerce where you can network with a community of business owners, such as yourself, who can provide guidance.
This Hot Deal is promoted by York Region Chamber of Commerce.