Contract tips

Written Contracts are About Clarity, Not Trust

You need detailed written contracts, even with people you trust

Several years ago, I went to small claims court and sued a lawyer for non-payment.

After some wrangling, we settled with both of us feeling ripped off.

In retrospect, we could have avoided all the ugliness — and perhaps even still be working together — if we had written and both signed a contract that detailed the project and clearly defined what was included (and not included) in my fee, along with our respective obligations and responsibilities for moving the work forward.

I outlined those details in my proposal. He sent an email that said, essentially, “Let’s get started,” and blew me off when I suggested a written agreement.

It was a red flag I shouldn’t have ignored.

But the project was a series of ebooks I really wanted to write and produce, and the client promptly sent me the initial payment, so I shushed that little voice in my head that told me to get him to sign the contract.

Our primary point of contention had to do with revisions. He had retained me to ghostwrite and produce a book; I thought I was clear on how revisions would be handled, but he disagreed.

We both dropped the ball — and we both knew better.

When I told him I had done all the changes as outlined in my proposal and there would be a charge for the additional revisions he wanted, he got angry and threatened to sue me. So I sued him first. But that’s another story.

My point here is: Insisting on a detailed contract does not indicate a lack of trust. Rather, it provides a vehicle for you to confirm your mutual understanding of your agreement.

Contracts don’t have to be formal, complex documents (depending, of course, on what they cover); they just have to clearly outline the deal you’re making. Reviewing the contract gives you the opportunity to say, “Wait, that’s not what I meant,” or “That’s exactly what I expect.”

Some tips on contracts:

Make standard provisions apply to both parties. If, for example, the contract exempts the supplier from specific liabilities, the language should be revised to exempt the customer as well.

Use precise language. It’s difficult to enforce vague language, so be specific. A clause that states a supplier isn’t responsible for failures due to causes “beyond the vendor’s control” leaves a lot of room for interpretation. More precise language forces a greater level of accountability.

Include a default provision and an escape clause. Describe the circumstances under which either party would be considered in default and what will happen. Also define what’s necessary to terminate the contract if either party wants out.

Don’t assume anything not in writing. If it’s in the contract, it’s enforceable; if it’s not in the contract, it’s not enforceable. Period.

Consider a legal review. Depending on the amount of money and the degree of risk and liability involved, you may want to have an attorney take a look at your contracts.

Sign on the dotted line

It all comes down to this: If you don’t have a written agreement that’s been signed either physically or electronically, you don’t have a deal.

As a ghostwriter and publishing consultant, I work with a lot of entrepreneurs and business owners. One thing most of them have in common is a resistance to handling the details.

I’ve learned to tell them that’s fine — the details are my job once we have the agreement in place, but we need that agreement first. That lawsuit was an adventure I don’t want to repeat.

A version of this article was originally published on my site at CreateTeachInspire.com. You can reach me there or email me at [email protected].

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