From construction works to photography services, many organizations would always look for clients that would be responsible enough to do their part to fulfill a strong commitment. And for companies accountable for providing these particular services, protecting their assets is a top priority. This is, most especially, important in the business industry where more than a thousand lost in their annual revenues due to the neglect of other parties. Therefore, one way to ensure that the opposing party complies with your terms and arrangements is to put your agreement into writing in the form of a contract. So, learn more about contracts with this article.
In simple terms, contracts are legal documents designed to set the expectations of those involved in an agreement. Because of what they intend to do, business contracts must be written clearly and accurately to cater to your needs no matter what purpose it may be.
Any company would always want to give their hundred percent effort and commitment to providing quality and cost-effective products and services. In business, resources, and labor, must be paid on time. But what happens when a client refuses to pay? According to a published report by Score.org, clients must pay $10,000 to seek legal actions. In fact, this happens, which is a fallback to the company’s reputation and revenue. That is why a binding relationship must remain valid by signing a written contract. So, when the client refuses to secure the payment, you can easily discuss the policy to your client under the agreement letter.
In creating a comprehensive legal contract, below are the steps that you can follow.
Before you get into writing, it is essential to begin knowing the type of work you will do. Know that contract agreement letters are useful for a variety of purposes, such as in real estate and entertainment. Therefore, it pays to set an appointment with your client to discuss the scope of work and its limitations. Perhaps, you already know the stages, phases, and procedures of the job base on the proposal you presented before. But if no plan has been discussed, asking questions, researching data, and knowing the clients on their specifics will help you organize the information for the next step.
Next, you must outline the task that you intend to do. This written action plan is part of any business management contract designed to inform the client regarding the possible result and general risk of the process. Do note that this section is crucial because you can’t do revisions once the document is signed. You can leave a one-liner descriptive action plan in each stage, instead.
Aside from the task list, it is a given to include the financial plan and project schedules. Here, all the resources, the number of workforces, and operation time duration must be final. The latter must be in a correct arrangement because this can affect the budget plan and target end date. So, plan and weigh in potential delays. Remember, you can’t revise a signed contract. Perhaps, you don’t also want to violate the expectation of your clients.
And lastly, pick a readable font style. A clean yet straightforward document is always enough to make the details understandable. With this, you can maintain professionalism. Also, most of your clients are investors and business-minded individuals. A reader-friendly and minimalist sheet is more useful to different clients from different industries.
There are two common types of contracts, including fixed-price and cost-reimbursement contracts. These are entities that protect legal rights.
Contract laws are relevant because they protect assets and reputation. Especially in business, it creates an enforceable responsibility, which is your greatest power to secure what you have.
The contract remains valid when there is a signature from both parties. Therefore, both sides are held liable when there is a tendency to neglect responsibilities.
Law is the law. And in business, wasting time and money to a client who may refuse to do their responsibilities is always bound for sanctions. So, when you provide your service or products, a contract agreement letter should display as your number one tool to secure all your entities. Verbal promises are alright. But it pays to jot all of them in an enforceable document.