Whether you work as a freelancer serving other businessowners or sell a product or service, you’ll need agreements in place to protect you and the customer. Drafting a businesscontract may seem almost impossible for those who have no legal experience, but you can avoid the complex and keep the form simple and pointed.
When you have limited experience writing and dealing with contracts, it’s a good idea to have a legal professional review your work. You can draft the agreement and pay an attorney to ensure there aren’t any loopholes that might trip you up. Here are some steps to follow for drafting a business contract when you have zero legal experience and are new to the written agreement game.
Around 25% of freelancers struggleto get clients to sign a contract. One reason may be that the wording is too complex and the person fears they're agreeing to something detrimental. How professional a contract appears may affect whether the customer wants to sign it. Your first step to drafting a business contract is knowing the format of a professionally drafted one. You’ll find sample contracts online and in your own paperwork. Pay attention to the layout. What are some typical areas covered?
How is the signee referred to in the sample contracts and how do you wish to refer to yours? Make a list of the areas you wish to cover and in what order.
What is standard in a business contract in your industry? If your competitors include a particular clause in their contracts, it’s likely because they’ve experienced something that made them add a section to protect themselves.
Every field has different concerns, so pay attention to what those in the same industry prioritize. Adding something as simple as a note that you have the right to cancel a contract at any time can save you years of headache dealing with a particularly difficult client.
You also must consider your own costs and the contracts you sign. You may need to draft a contract with a company you buy supplies from. You can maintain some control over cost increases if you’re smart about the language you put into an agreement.
Business owners point to pricing as a major obstaclewhen generating procurement contracts. Many companies find even with an agreement on policies on shipping speed or where to buy supplies from, policies get ignored causing financial hardship to the company.
Get everything in writing and insist all parties adhere to the agreements for the best results.
An excellent business contract looks at potential contingencies and writes them into the agreement. What happens if the supplier’s factory burns down? How will you fulfill an order to a client if you lose half your employees?
Write in ways to cancel the contract by either party with notice that is fair to both sides. Look at every potential pitfall that might occur and address it in the agreement. As you work with a boilerplate, you’ll see what you should add to protect your business’ best interests but also maintain a positive relationship with customers.
Add protective language into your contracts so that people know they can’t resell your intellectual property or otherwise use your name without your permission. Over 4.66 billion people use the internet--a number that grows every year.
What happens if you sell a digital product to a user and they share it with 10 of their closest friends? Those friends pass it on to others and it gets pirated and shared with thousands for no charge?
Understand laws built to protect your work, such as the Digital Millennium Copyright Act (DMCA) and be ready to act on any abuse of your intellectual property. In addition to utilizing DMCA takedown notices, be ready to protect your proprietary information by adding non-disclosure agreements to your contracts.
Avoid using legalese in your writing. A well-written contract should feature language anyone can understand. Trying to trick customers into signing something without a clear understanding leads to distrust and broken agreements.
Run yourcontract through a checker such as HemingwayEditor online grammar checker and see what the reading level is. Aim for a level of about seventh grade or so to ensure anyone can understand the language. If the checker throws up instances of complex and hard to read sentences, rework them so they’re easier to understand.
We live in a digital age where you might have customers in another country or across the continent from where you’re located. A broken contract may require litigation. You’ll want to be sure you can sue from where you’re located and not have to go to their location.
For example, if you live in New York City and have a contract with a company in Los Angeles, California, you want to go to court in New York and not the West Coast. Write it into your contract where any disputes get tried and stick to the clause to prevent untold expenses should you or the customer sue for breach of contract.
It’s wise to get several sets of eyes on business contracts to check for things that might trip you up. Take the time to read it out loud. Make notes on anything not clear or that might cause issues later. Don’t be afraid to revise the contract if it isn’t working. Some customers may leave over a change in contract, but others will understand your business is growing and you need to make adjustments to remain profitable.