You Signed It, They Signed It…But What If That Didn’t Happen? Contracts 101

We sign contracts all the time. In fact, every time you visit a website that uses cookies and you hit ‘accept’ when it pops up or you download an app and agree to the terms and conditions, you enter into a binding agreement. If the game you download on your phone has a contract in place, don’t you think real life contracts are just as important? I’m always surprised at the number of times someone comes to my office needing assistance because a handshake agreement went terribly wrong. Even if you think everything is going to work out perfectly fine, get it in writing. Of course in business, you need contracts, that’s a given. Here are some of the other common times you need a contract. Home Renovations Homeowners, make sure you have a contractor that is licensed in your county or city. You can double check their status with your county consumer affairs office. The license number should be on the estimate or contract. Make sure everything is outlined in the contract: expected time frame, budget, extra costs, modifications, etc. Contractors, make sure you have the proper licenses in place. If the homeowner does not pay the bill and you don’t have the proper licenses in place in New York, you cannot sue. If your contract doesn’t cover what you are trying to enforce, like extra costs, it might be difficult to recover. If you want legal fees, if you have to sue, make sure that provision is in the contract. If you are going to agree on something via text or email, save the correspondence. Print it out. If something does go wrong, that exchange can be part of the lawsuit. Contracts protect both parties. Even if it’s a friend doing the work or you are doing work for a friend and you think you can trust them — when money is involved things get complicated. Get things in writing upfront and ease the stress later. Leases Contracts are vital here. If you are going to lease a property, ensure the tenant knows what is expected of them. If you have a unit and you do not want them to use the basement, spell that out. If rent is due on the 1st, spell that out. If the tenant is responsible for maintenance, make it clear from the beginning. On the flip side, if you are a tenant, ensure you know what is expected. If the landlord says you can have a pet on the unit, for example, but you don’t have that in writing, it could be trouble later.   Events If you are hiring a caterer, make sure everything is spelled out in the contract. You don’t want to get an extra bill later because they said they used three extra pans of ziti. Know what is involved, the taxes, gratuity, etc. If you book a venue, make sure the contract outlines if something happens – what if there is a flood or a power outage? What is the refund policy? On the other side, if you are a caterer and you expect 50% of the cost upfront and 50% after the event, put it in the contract. If the person does not pay you the balance, you have the signed contract to back you up. If you are doing linens for an event and they get ruined, make sure the contract outlines added cleaning fees. You can’t enforce something that isn’t there. Think about all the possible scenarios and get them into the contract. Freelance Work Let’s say you are going to cut grass in the neighborhood. Make sure you have something in writing that outlines your costs and how you expect to be paid. It doesn’t have to be complicated. A simple, one-page agreement can work. If you are the person using the lawn services, make sure there is a contract of what you are willing to pay for work done. You don’t want to find out the person did extra tree cutting without your knowledge and sent a $500 bill. If you are designing your friend’s wedding invitation, make sure your contract states that they need to approve the final design before printing, so they can’t come back to you with changes that cost you more money. Cultural Differences Breach of contract can be different in other countries. Not all cultures feel the same about a verbal agreement. While in some countries, word is bond, that is not the case for others and cannot be enforced in a court of law. If you are working with someone out of the United States, make sure you are both on the same page (literally) with a contract that fits both of your needs. A Few Things To Remember -Contracts do not have to be robust. They can be as simple as a one-page outline. But that document is gold if it’s needed later. -Add language into your contracts to leave room for modifications. Put something like “any updates to this process may be discussed and changed via email.” -Use e-sign services for convenience and put language in such as, “an emailed copy can act as an original, etc.” -Make sure both parties expressly understand the contract before signing it. If you need help drafting, reviewing or dealing with a contract, call me. I can help at any stage of the process.