It doesn’t matter if it’s a partnership or other business relationship that you want to put in place. You should have a written contract memorializing the arrangement to protect both parties. If the thought of asking someone to sign a contract makes you feel uncomfortable, imagine something happening that ruins the relationship you’ve had for years and losing that trust with one another. Contracts make working with vendors, independent contractors, and clients simple and less risky. A contract will define and list the many aspects of the business relationship. It can be tempting to agree on the details verbally instead. But using a written contract makes it official and sets boundaries so that each party is protected.
Now that we know the importance of contracts, you might be wondering what types of contracts your business should have. Here are some common types of agreements we work on for our clients.
1. Client services agreements – These are some of your most important agreements. They outline the work you will be doing for your clients and how you will be paid for that work. They also protect your business from many potential liabilities.
2. Vendor agreements – These contracts allocate responsibilities between your business and the vendors it purchases goods and services from. They outline what the vendor will provide to you, how it will be provided, and what will happen if things don’t go as planned.
3. Independent contractor & employee agreements – Your workforce is the heart of your business. These agreements protect your business when key employees want to move on. They help you protect your company’s intellectual property, your customers' personal information, and the investment you’ve made in your employees.
4. Website privacy policies/terms of use – All businesses with a website should have these. They let your customers know how your business handles their personal information and tell visitors to your site what is and isn’t okay for them to do with content on the site.
5. Licensing agreements – Intellectual property can be one of a business’s most valuable assets! If you’ve created a killer produce or service that other people want to pay you to use, you’ll need a licensing agreement. These contracts tell the other party what it can and can’t do with your property and preserves your rights if your property is misused.
There are many ways to avoid the uncomfortable situation that arises when you and a business partner disagree. It doesn’t matter if the relationship is with someone you have known for years and trust or with someone you’ve just met. Sometimes your longest and closest relationships are the ones that most need a contract. A contract is not something you do once you feel personally attacked and need to protect your business, but something you should put in place in the beginning of the relationship. At the end of the day remember - it’s not personal; its business. The options and remedies available to you when things go wrong are determined by the contract.
Many companies hire our firm to create a set of contacts that they can amend as needed to suit each business relationship they have in place. This saves time and money and give the business owner the power to initiate contracts on their own with confidence.
We also have fractional general counsel retainers for clients who need ongoing support during times of growth and transition. One of the ways we help these clients is by reviewing and revising contracts they receive from other parties. We also help negotiate terms with their business partners. We do this to make sure the client fully understands what they are agreeing to and to make sure that they are comfortable with the level of risk they are taking on in each contract.
In either case, we recommend that we revisit your contracts every 6 months or at least once a year.
Do you know which contracts your business should have?
We would love the opportunity to speak to you about your contract and general counsel needs. You can get to know me at our next Lock In Your Legal Event.
