1. Contracts protect both parties
A contract is a negotiation and an agreement between two parties where each party defines their expectations and obligations. Do not sign any contract without first asking how that contract protects you. If the contract does not protect you, it may be time to renegotiate your contract.
2. Never start work without a contract
This one may seem obvious, but sometimes people are anxious to get started on their new job. Do not fall into this trap. Never put the cart before the horse and begin work prior to signing a contract with the other party.
3. Never blindly accept the other party’s terms
We all sign contracts without reading through them. In business, this is a bad idea. if you do not understand something in the contract, ask. If there are terms that you do not agree with, try to negotiate better terms. If the other party refuses to negotiate, take some time to consider whether or not you really want to sign that contract.
4. Anticipate negotiation, and know your key points
When you present a contract to someone, expect that they will want to negotiate. When this happens, you need to know your key points. These change from contract to contract, but in general, you want to define when the customer will receive the product or service, when payment is due, what happens when the customer wants to terminate the contract, and any liability that might arise out of the contract.
5. Know when to lawyer up
If they show you their lawyer, you need to show them yours. Any time the other party wants to get their lawyer involved, make sure you have a lawyer representing your interests as well. A lawyer who knows that the other party is unrepresented, may try to take advantage of that person. This happens more often than you may think.
6. Always be specific and confident about money
When someone asks you how much something will cost, be confident and tell them. Never say that you’re not sure. If you do not know how much it costs, tell them you’re going to find out and will get back to them as soon as possible.
Next time you need to sign a contract with a customer or a vendor, follow these six key points, and you will be less likely to run into trouble down the line.