Jan 29 2008
Contracts Are Essential To Business Relationships
Everyone dreads the term “contract” but in reality a contract can be your best friend. When business relationships are created there are always expectations from each side of the relationship. For example, if a web design firm is developing a website for a car dealership, the car dealership expects to get a good website and in return the web design firm expects to receive payment for the web design services rendered. It sounds simple enough but it can often get messy when no contract is involved.
Contracts outline the relationship and show what both parties receive for the agreement. Contracts can be as simple as creating a one page word document with bullet points outlining everything and a signature from each party to a complex business agreement between both parties with numberous amendments and clauses. It’s totally up to you to determine the complexity of the contract and most likely every project contract will need to be customized to meet the expectations of each project and each party involved.
Contracts are a benefit for both parties as it shows exactly what each party will receive with no confusion. Without the contract, one party might “think” that they should be getting more that what was agreed upon initially. If the contract is in place, this party knows exactly what they are getting.
People by nature always try to cross the line and get a bit more than what was expected. Without a contract, this is much easier. When a contract lists what services will be provided…..and when a person asks, “can you also help me with….”, you can say…”sure I can help…but this will cost you X amount as it is not in the contract agreement.”
There is no confusion and if this person wants extra services thrown in, then they will be obligated to pay for the extra services. Often, friends will work with each other on projects and many neglect using a contract because they are “friends” and in return a friendship can be ruined due to the disagreements throughout the project lifecycle and what was expected. If you value a friendship, then a contract is needed to keep it.
It only takes one project to realize that you need a contract to survive and keep everything in line. If you don’t believe me, do a test with your next two projects. For one of them, don’t do a contract and for the other, create a contract that both parties agree upon. See which project makes you happier!
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