When running a business where you are providing services to a customer, it is important that you have a valid contract in place that lays out exactly how the business relationship will work.  While we all like to hope that we are not going to have any problems with our customers, this is not the reality.  And if you find yourself in court with a customer, the first thing the judge is going to want to do is review the contract.

In drafting a contract, there is usually nothing wrong in keeping it simple. One technique that will help you keep it simple is to think of the following questions:  Who are the parties to the contract? What is the contract for? How much does it cost? When is the service to be provided? When is payment to be made? How does the contract terminate?

In addition, when drafting contracts, I advise my clients to be a little selfish. For example, let’s assume you are my client and have been hired to perform consulting services for a technology company at the rate of $100 per hour.  The project requires you to work 40 hours per week for 24 weeks, making the project’s value $96,000.   While a common clause in contracts allows either party to terminate the contract with or without cause upon providing the other party with 30 days’ written notice, I would advise you to be selfish and propose language that states the contract can only be terminated with cause.  This way, as long as you perform the services agreed to in a competent manner, you will be entitled to receive payment for a period of 24 weeks.  On the flip side, if I were representing the technology company, I would advise them to give themselves the ability to terminate without cause upon providing you with 30 days’ written notice.

A similar technique can be used when it comes to pricing.  If you are happy with the rate of $100 per hour, the contract should state that the price shall remain constant throughout the project’s duration.  On the other hand, if you consider $100 per hour as an introductory price used to get your foot in the door, you may want to propose fee increases after 60 days and 120 days.

Coming Next Week – I Received A Money Judgment; Now What?

Michael Weinstein is an attorney with MBW Law, LLC in midtown Atlanta. He specializes in litigation, insurance coverage, landlord/tenant, corporate transactions and employment law.  Contact Mike at (404) 228-2629 or mike.weinstein@mbwlaw.net.

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