You may think of your small business as something very personal to you. Your employees and customers are like family, and you enjoy the comfortable, informal relationships you have with them. However, business is business, and at the heart of many successful business deals is a solid contract.
While you may not be ready to ask your employees to sign a non-compete clause, you are losing some critical protections if you are not using contracts with your clients. A contract may not prevent a lawsuit, but a well-written agreement can provide you with solid ground on which to stand if a dispute should arise with one of your clients.
Contracts simply outline what each party expects from the other. Having these terms in writing and reviewing them with your customer before agreeing to work together gives both sides a chance to discuss, negotiate and fully understand what you promise to do. Some important elements of a contract include the following:
- A description of the steps of the project, including any materials your company will supply
- The total amount your customer will pay and the dates when payments are due
- The type of payment you accept, such as check, credit or cash
- Your process for collecting delinquent payments, including any fees or interest
- The date when you expect to complete the project or deliver the goods
- The conditions under which one side may cancel the contract and the penalties for cancellation
Your contract should also outline the steps either side may take if the other party does not meet the terms of the contract. For example, if your customer is not satisfied with the work your company does or the product you deliver, you may prefer to take the matter to mediation. Without having this stipulation in a contract, you may face expensive lawsuits that can be detrimental to your business.
The personal benefits of using a contract
Personally, you and your employees may find that having a contract for each project keeps you focused on completing the task more efficiently since you can refer to your agreement throughout the process to ensure you are meeting the promises you made.
Nevertheless, you may still end up facing a lawsuit from an unhappy customer or even filing a claim yourself if your client refuses to keep the agreement. Having a strong business relationship with a skilled attorney means you have someone to assist you through every stage of the process, from drafting your contracts to representing your claims through mediation or in a Texas courtroom.