As a small business owner, one thing that you might be wondering is why it is important to have contracts with the people and companies you do business with. To put it simply, contracts are the backbone of your business — and your business relationships.
They’re important because they outline the full expectations for both parties, and what will happen if those expectations aren’t met. In other words, they PROTECT your business by documenting the full understanding of the relationship so that there aren’t any misunderstandings later down the road.
Nobody wants a misunderstanding. Business disputes can lead to a lot of wasted time and money on your end — not to mention, they’re a huge headache. And should something go wrong, your contract is enforceable by law and will be able to support you if you decide to take legal action.
What should a business contract include?
Here’s what a standard contract includes:
- Scope of work
- Payment amounts and terms
- Circumstances under which the contract can be terminated and how that will be handled
- Terms related to failed obligations
A word to the wise: Always have an attorney review or draft your contracts. Many business owners mistakenly think that using an online template, or writing a contract themselves, will save them money — but that’s the furthest from the truth. Although it may be tempting to use an online template, hiring an experienced lawyer will ultimately save you money in the long run, and here’s why.
You should have contracts with anyone you do business with, whether it’s your employees, clients, partners, shareholders, service providers, contractors, vendors, or insurers.
Contract development is just one thing that our team can help you with.