A contract is an agreement between you and another party, for example a sales contract that you and your client signs.
A contract establishes how two parties will cooperate and what each party’s duty is.
Examples include rent agreements, credit card agreements, employment contracts, or the terms and conditions you agree to when signing up for a streaming service.
What should be included?
Let’s take a look at a sales contract. It’s what you should always send your clients to sign when you’re going to sell goods and services without upfront payment, for example when you agree to long-term projects or you’re selling recurring services.
There are certain things you should include:
- The name and contact information of the seller and buyer
- A description of what is being sold, for example an ad campaign for $10 000
- How the product or service will be paid for, and the deadline to pay
- Who is liable in case of loss, damage or if you don’t deliver the product or service
There might be additional things you want to add, depending on what you sell. For example, if you’re entering into a long-term project you might want to include information about whether you or the buyer can terminate the contract before the project is finished, and what conditions must be met in order to do that.
Why is a contract important?
A contract is important for several reasons. It ensures that you and your client are on the same page from the outset. If you set up a contract and share it with your client, you can iron out any disagreements or confusions before you actually start work.
Additionally, sending out contracts shows clients that you run a serious business.
Most importantly though, it gives you or your client something to refer back to in case there are any disagreements. If your client claims that you didn’t deliver as per the agreement, you can go back to the contract to double-check the terms.