Why You Need A Contract

Having a contract will help keep both you and your customers protected...and on the right track for doing business together.

Truth: A lot of the time, when something goes wrong in business, it could have been avoided.

Or, at the very least, the impact could have been minimized.

How? With a contract.

Doing business without a contract is kinda like doing youknowwhat without protection. Crossing your fingers and hoping that things work out ok because that new client or partner looks like they’re a nice, respectful person can work sometimes.

But when it backfires, it can backfire spectacularly.

I get it. Contracts can feel stuffy. Or too formal. Or not a ‘good fit’ for all businesses. You may think that because you would never dream of ditching on a payment, or copying someone else’s work, or stirring up legal trouble that others would behave in the same way.

And I wish that were true – but it’s not.

A few years ago, I was attending a yoga studio that had a volunteer program. People could volunteer at the studio in exchange for free classes. Great idea.  But there wasn’t a formal agreement in place to cover exactly how this would work. I asked the management about implementing something to help curb the number of skipped shifts and poor behaviour.

But, as I was told, having a contract just didn’t fit their community. They wanted it to feel like a fellowship or family – and putting something in black and white would just make it feel too business-like. Sigh. So no volunteer agreement was created, and the program struggled.

What makes me sad about that situation (aside from the state of the showers after a few missed cleanings…) is that having a contract doesn’t mean going against the culture or personality of your business. It’s a tool that helps get rid of the noise and risk  - so that your business can just keep on keepin’ on, doing what it does best.

Today, I’ll be sharing with you the top reasons why you need a contract in place with any client, partner or vendor, as well as 3 ways that you can create a contract that gives you the protection you need, and still feels like a good fit for your business.

Protect your heinie

First things first. Contracts are important for protecting yourself legally.

Intellectual Property is big – no matter what your industry. You need language in a contract that clearly indicates who owns what, and how it can be used. Also make sure to include a section that shows what your liability is. Meaning, if something goes wrong with the product or service you’ve sold, are you on the hook for $100? Or $1,000,000?

Protect your time and money

You know what stinks? Delivering a finished project to a client….and then not getting paid for it. Or getting their approval on the final draft….and then having them change their mind and send you back to the drawing board another five times. Having a contract in place that covers the HOW of doing business together when it comes to process and payment will make it a lot easier to either collect on that invoice, or put your foot down when your boundaries are being tested.

Protect your clients

Trust me. Your clients should want and need a contract just as much as you do. The benefits I mentioned above – protecting IP, setting the terms of engagement, getting clear on liability and responsibility – both of you will benefit from having those covered. If you’re preparing to work with a client (or vendor, or partner) that’s refusing to put a contract in place – that’s a red flag. Run, don’t walk towards another client instead.

Great. So I’ve convinced you that you need a contract!

But you’re still worried it’s going to be ‘not you’ to have one in place?

Here are 3 ways that you can match up your protection with your personality.

1) Writing Style

You don’t need to fill a document with legalese in order for it to meet the criteria of a contract. As long as you’re following a standard contract structure and including the right elements, you can write like a normal person. For more on this, check out my post on using plain ol’ English in your contracts.

2) Short Form

I’m going to bet that you don’t need a 50 page contract. In fact, I’d hazard a guess that you don’t even need a 10 page contract. If a contract feels stuffy or overwhelming, focus on the basics and keep it to 1-2 pages. Simple. Straightforward. No room to get lost and confused. 

3) Flare

You’ve put a lot of effort and energy into creating a brand that works well for you – and that can extend to your contracts. Your colour scheme is green and blue? Use those colours for a header & footer border. Have a great logo? Put it at the top of the page. Enjoy writing in calligraphy? Use your best pen to sign your name on the final document. Sign it with a flourish – knowing that you’re doing a great thing for your business.

How do you feel about having a contract in your business? Have you had an instance where your tush was saved big time by something you'd had in writing? (or maybe you can share a time when hindsight was 20/20 and a contract really would have come in handy?) 


Important note: I’m not an attorney. I’ve just spent enough time working with them, and drafting (and re-drafting…) contracts to now be pretty fluent in ‘lawyer’. I recommend seeking out guidance from a legal professional when it comes to creating your contracts and conducting your business.