A handshake or a verbal discussion may seem like enough to start a business relationship, but a contract is a crucial next step. A written contract is a legal agreement that can protect you, your business and your clients and customers.
Why Have a Written Contract?
If you’re weighing the importance of a written contract, know that a formal agreement can:
1. Protect Your Business, Yourself and Your Customers
A written agreement is legally binding and enforceable. So are many verbal contracts, but it can be harder to enforce them because there is no proof of what was agreed upon.
One of the most significant benefits of having a contract is that it can prevent certain liability claims and other legal cases. For example, if you are a contractor and complete a roofing project, your contract can protect you if the property owner makes changes to the roof after you leave and then sues you for a leak.
A written document gives you leverage in negotiations, mediation or litigation, because you can establish your obligations and those of the other party. Provided it complies with public policy and legal statutes, it can reduce the risk of liability and protect your customers and clients in case something goes wrong, as well.
2. Define Expectations
A written contract can define the scope of the project, payment expectations, the final project design and other considerations. By creating a written agreement, you and the client will know exactly what to expect from each other when the project gets underway, streamlining communication and reducing the likelihood of surprises.
3. Help Your Business Grow
Written contracts show clients and customers that you care enough to protect everyone legally. This can increase trust and foster more positive relationships.
Contracts also offer a paper trail you can use when analyzing your business or speaking with lenders and investors. Formal agreements show steady business growth while helping you protect your intellectual property, trade secrets and other assets, which gives you an edge as you continue to scale.
Contracts Are Simpler Than You Might Think
As a small business, you may need a legal team to draft documents. Business Consumer Alliance can help, with contract formation services and a BCA membership program that offers arbitration and mediation services, collections assistance, access to attorneys and other benefits. Sign up today to get started.
About Business Consumer Alliance
Business Consumer Alliance (BCA) is a nonprofit organization focused on strengthening integrity in the marketplace. We help consumers by resolving disputes and providing transparent business reputation reports. At the same time, we support contractors, movers, and small business owners with contract assistance, arbitration services, reputation management resources, along with business and HR advice. We’re here to help good businesses stand out and succeed while protecting the public.