Your contract jargon buster – are you working on a myth?
Does contract jargon make your head hurt?
There are a lot of myths about contracts for your business.
Some of them will cost you time and money. Real money!
Contract jargon buster and myth checker
- Contracts must be written down - a verbal agreement can be just as enforceable - a handshake can be enough or an exchange of emails too.
- Your terms and conditions of business are not a contract - they may not be your entire contract but they form a significant part of it.
- You don't need a contract with your associates - you will find it difficult to protect your business if you don't have a written agreement
- An agreement is not the same thing as a contract - a verbal or written agreement can form part of your contract
- Once a contract is signed you can ignore it until you have a problem - if you don't comply with your side of the bargain you may find you can't make the other person comply with their side either.
- No-one reads or understands contracts in the real business world - far from it - successful business owners make basic contracting part of the business process and use it to protect their business and increase profitability.
- I don't need a contract the law protects me anyway - not true. There are laws that protect consumers from unfair agreements but in the business to business world your protections are very limited and mostly it is up to you to contract for the rights and protections you need.
What contracts do you need?
A lot depends on how you trade (online, offline, retail/services business to business or business to consumer). But as a minimum, your service business will need:
Types of contracts
- Terms of business/trade
- Associate agreement
- Contract of employment
Your terms of business (sometimes called terms of trade or terms and conditions) are between you and your customers
Your associate agreement (sometimes called your sub-contractor agreement) is between you and your suppliers
Your contract of employment is between you and your staff if you have any.
Remember to issue a contract
You need to issue the right contract. That is more than a contract that complies with your legal obligations, but one that helps you onboard your clients and team and protects you and your business from all sorts of unwanted surprises.