Doing business is about agreeing what you are going to do for your customer in exchange for their payment. An agreement is any understanding or arrangement reached between two or more parties. A contract is a specific type of agreement that, by its terms and elements, is legally binding and enforceable in a court of law.
Today, although a verbal contract is still legal, most contracts are in writing. Contracts are very detailed these days, and every effort is made to make all possibilities clear. Most contracts never see a courtroom, but when something goes wrong, a written contract protects both parties.
How-To’s of Contracting
Terms and conditions set out the rules by which you will both play by. They protect you if things go wrong and reassure the customer they are dealing with a business that will treat them fairly. Your conditions must be fair, otherwise you can’t rely on them.
Here are 10 tips to help you continue to be successful in your coaching business and avoid one of the biggest pitfalls:
1. Get it in writing. Although oral agreements are legal and binding in many situations, they’re often difficult to enforce in court. In the business world, most agreements should be in writing even if the law doesn’t require it.
2. Keep it simple. Contrary to what most lawyers think, you don’t need a lot of legalese to make a contract enforceable. Create short, clear sentences with simple, numbered paragraph headings.
3. Deal with the right person. Make sure the person you negotiate with has the authority to bind the business and has a vested interest in making sure the business performs its obligations under the agreement.
4. Identify each party correctly. You need to include the correct legal names of the parties to the contract so it’s clear who is responsible for performing the obligations under the agreement.
5. Spell out all of the details. The body of the agreement should spell out the rights and obligations of each party in detail. Don’t leave anything out.
6. Specify payment obligations. Specify who pays whom, when the payments must be made, and the conditions for making payments. Money is often a contentious issue, so this part should be very detailed.
7. Agree on circumstances that terminate the contract. It makes sense to set out the circumstances under which the parties can terminate the contract.
8. Agree on a way to resolve disputes. Write into your agreement what you and the other party will do if something goes wrong. You can decide that you will handle your dispute through arbitration or mediation instead of going to court.
9. Pick a state law to govern the contract. If you and the other party are located in different states, you should choose only one of your state’s laws to apply to the contract.
10. Keep it confidential. Your agreement should contain mutual promises that each party will keep strictly confidential any business information it learns of while performing the contract.