The Importance of Contracts

When doing any kind of work, it’s important to have a contract. Sure, it may seem a bit daunting for a beginning entrepreneur to delve into legalese, but contracts don’t need to be scary. They can be as simple as a plain-language document that outlines the general business between you and the client. In the world of small business, they’re important for the following reasons:

1. Contracts provide a written document that outlines the full understanding of the business relationship and scope of the work so that no one can claim any misunderstandings later down the road.
2. They specify exactly what rights are being purchased and what rights you’re retaining.
3. They’re binding and legally enforceable.
4. They protect both you and the client.
5. They stipulate how and when you get paid, what needs to trigger that payment, and what recourse you have if the client stiffs you.
6. They minimize risk.

Never feel awkward about insisting a client works with a contract. It’s a mark of professionalism and should actually inspire confidence, knowing that you take your business seriously. Any client who refuses to work with one should be treated suspiciously as that’s a serious red flag. And any small business owner who works without at least having something in writing, whether it be a formal document or just confirming emails, is destined for some serious heartache later down the road.


Original source: http://businessofillustration.com/the-importance-of-contracts/