Q:

Do I Need a Contract?

A:

Yes. If you’re even asking this question, you need a contract.

Business revolves around deals. I agree to do something for you, in exchange for some type of payment. Or you and I decide to enter into a business partnership together. These are two common business deals that take place millions of times every week.

But all too often, something goes wrong. I don’t perform my end of the deal quite like you expected. Or you don’t pay me. There could be any number of disputes, especially when the deal was only a verbal agreement.

People are typically getting along well when a deal is being made. Everything is rosy, and the parties are friends. But you have to think about what will happen when the deal falls apart. Who pays attorneys’ fees if you have to sue the other party to collect your money? Where will the lawsuit be filed? Or should all disputes be arbitrated instead?

A well-written contract can resolve all these questions and more! You can specify just about anything you want in a contract. But, at a minimum, your contract should cover these basic points:

• Who are the parties?
• What is being contracted for? (a sale of goods, virtual assistant services, etc.)
• What does each person have to do? (spell this out in as much detail as you can)
• Who pays attorneys’ fees and costs, if either party has to sue over the contract? (if the other party is supposed to pay you, you want them to pay the costs of collection)
• Where can litigation be filed? (this is important for contracts where the parties are in different geographic locations)

For important deals, it’s always a good idea to have an attorney draft your contract. And if you’re being asked to sign a contract, you should have an attorney review it. You want to make sure the contract is in your best interest and that you’re not signing something that could cause problems down the road.

When it comes time to sign the contract, be sure to sign it properly. I’ve written before about personal contract liability and e-signing contracts. You don’t want to have a great contract and then screw up at signature time.

Remember: if the deal matters to you, sign a contract. You may be friends now, but friendships can sour quickly. Protect yourself with a contract.

This is a bi-weekly feature at Home Office Warrior. Now is your chance to send questions to an experienced attorney. Submit your questions to Andrew at andrew@homeofficewarrior.com or leave your comments here.

Disclaimer: Andrew Flusche is a licensed Virginia attorney, but these posts do not constitute legal advice, nor do they create an attorney client relationship. For legal advice, consult an attorney licensed in your jurisdiction.