Is it smart to stick to a contract or work on a handshake?
Contracts are the backbone of business. Whether it's clicking on 'agree' when we want to access a website or signing our name to an unread cell phone contract, we are surrounded by pages of fine print. The question is, do you want to run your business that way? Is it a help or a problem?
A contract spells out what you and the client expect from each other. Like a good negotiation, a good contract benefits both parties. What makes a good contract?
- Clear language
- Easy-to-understand rules
- Agreements for both parties
- Concise language, the basic minimum to get the point across
But times have made the contract seem loathsome, and in our litigious society, the perception is not who signed a contract, but who has the most powerful lawyer to break a contract.
What are your choices? You can work with a handshake, and many people still do. Sometimes, all you need is to make sure you and your client agree. These ideas aren't legally binding, but may work for you and your client. They have elements of both a handshake deal and a contract.
Careful Communication Replaces Contract
You can replace a contract with a good conversation and a follow-up email. Sit down (or call) your client and have a talk about what each of you will do and not do. Agree to details. Take notes, then follow it up with an email. Make sure the client returns an email that agrees, then keep both emails.
Be clear about what you offer and let the client know it ahead of time. This is often done in a letter of agreement. If you provide a service, this is a good way to be clear about what you offer, what you do not include, payment amounts and schedules and some basic understandings.
If you are a designer, you can spell out your process and make it as clearly defined as if you had a contract. Clients pick a choice from a set number of designs, typefaces and colors. Interior designers or graphic artists can insist clients take color swatches to make sure the colors/size they loved at the initial meeting is still what they want when they are back at their own office.
Once the initial choices are made, ask for 50% payment up front, before you start work. A charge card payment makes a pretty good contract. Limiting what a client can change also limits what a client can be unhappy with. Include delivery dates and a clear list of what will be delivered and when.
Whether you create and have clients follow the letter of a contract or not, communication is still the best answer to solving problems. Nothing will guarantee success at every turn, but good communication, keeping e-mails, providing color swatches and payment in advance are all good ways to keep problems from happening.
About the Author: Quinn McDonald is a writer and nationally-known speaker who has achieved the "Professional" designation from the National Speakers Association. Contact Quinn through her website, QuinnCreative.com.
Nice article, and I'm happy to see someone in our business making sense in regards to this topic. Too many people just write "you MUST get a contract at all times!!!" Yet the simple fact is, if someone is really going to decide not to pay you, there's not much you can do even with a contract. If I'm doing a high-dollar project, I write up and require a signed proposal (with deposit) that is, in effect, a contract. But to me, the purpose of the proposal/agreement is to clearly articulate/list what I'm going to do, the deliverables, and for how much I'm going to do it for. And also to get a deposit. Again, the client could just stop responding and there's no way that attorney fees/hassle are going to be less than the owed amount. I'm a part-time freelancer (I have a full-time job during the days). Most of my freelance work is for smaller dollar amounts (< $1000). Even if I did take someone to small-claims court and win, that doesn't mean they're compelled to pay.
mark
www.elearninglive.com
Posted by: Mark | October 13, 2008 at 10:22 PM