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7 Key Elements To Include In Your Business Contracts

Sharing seven key elements that need to be included in your business contracts. | Imperfect Concepts #smallbusiness #legal #consulting #blog

Since launching my business almost seven years ago, two major things I’ve learned are to get everything in writing and to make sure contracts get signed before money is exchanged. During this time I have had several regrets come from no contracts and from me losing thousands of dollars when hiring someone or when someone was hiring me. However, now, I don’t work with clients until a contract or retainer agreement is signed and payment is paid in full. 

Parties Names

This might seem simple to you but there have been numerous times where I have been sent contracts where the other person’s information was not transcribed into the contract. All the blanks are just blank. When new clients sign on to ICB Consults they receive a business contract from me which has all my information filled in. Make sure yours and their full legal name, address, & company name are included.

Term of Contract

This is a big aspect of the contract. How long will you be working together? Is it a one time service or on as needed basis or will you be working with them over a course of time? Make sure the term of length of said service or project is mentioned throughout the contract. Even better, have them sign their initials next to it for acknowledgment.

Project Description

What exactly are the services you will be rendering or receiving? You want to make sure everything is spelled out in detail to be upfront. Do not leave  any wiggle room because it can cost you later. I have noted in my contracts that clients are hiring me for consulting that is based upon an hourly rate. They are only receiving information on that call. They are not entitled to anything outside of that one call a month. If I do provide something it is at my discretion. You know when people say “that’s not in my job description”, well this is the time for you to make the project description as detailed as possible.

Payment Obligations

This is a huge one for my business. No services shall be rendered to clients until services are paid for. I do not do free consultations, I don’t do 15 minute consultations. I charge essentially for every minute that I am talking to you. Make sure you outline the payment obligations your clients must pay. I personally suggest to all clients that they charge 30% upfront, depending on the type of work being rendered.

Sharing seven key elements that need to be included in your business contracts. | Imperfect Concepts #smallbusiness #legal #consulting #blog

Various Fees

If a client wants to quit consultations there is a fee they must pay. It’s a percentage of what is left of their contract. Most people call this a “kill fee”. Make sure you list all the fees clients will occur when it comes to working with you. Say you’re an event coordinator and a client wants a certain type of vendor that they prefer you use. You can attach a fee for VIP vendors versus general vendors.

Ways To Dispute Contracts

If you were to enter in a dispute over the contract, how would it be handled legally? Would you go to mediation, would it go to trial, what would happen to your business? These are all things that need to be thought out and put into your agreements. Make sure you are protected.

Confidentiality

There are too many blabber mouths out there. Make sure to put a confidentiality aspect in your contract or have a NDA that your clients sign separately. This will protect private business aspects and parts of your business and your personal life that should not be shared with the general public.

It should go without saying, all of this needs to be typed out and copies need to be kept for your records. A general rule of thumb is to keep things for seven years. All my contracts are saved to cloud. If you are needing affordable legal resources for your business, I highly suggest checking out Brandi Howard Legal Education For Entrepreneurs.

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