Three Powerful Benefits of a Written Contract and How it can help to secure your business as it grows and expands. (Part 1)
Dear Entrepreneur and Business owner,
Do you have a contract document that spells out the terms and conditions of engagement with your customers?
Without a strong, enforceable contract in your business dealings, you may as well be leaving your fate and financial destiny to the whims and caprices of clients.
Customers who may take your product and refuse to pay up. Or those who will solicit your service and decline to settle as at when due. And yet watch idly as you struggle to survive and stay afloat in business.
Here is a story someone shared.
“I got a job to create a 3D Motion logo and opening montage for a television program. In my desire to create a lasting business relationship with the producer of the program, I jumped in without a formal contract.
13 months down the line, after completing the job, I am yet to get the full payment. This popular TV producer has been using the 3D motion logo I created and has refused to pay the balance.
He managed to butcher the money into bits and pieces. With some amount left. I have no formal contract, but words between me and him all alone at a fast-food restaurant. I have no written contract to enforce payment. I am reduced to pleading and begging for my money.”
Along the same lines, sometime in 2019, Twitter (in Nigeria) was abuzz with the tweet of a lady Graphic Designer.
The lady called out an A-List Actor/Director for using her designs in his movie and without payment. The movie had gone on to box office success. More than a year after she had done the job, she was yet to receive payment.
It was only after her tweet went viral and friends of the A-List Nollywood Actor/Director, stepped in, that money changed hands.
These are a few instances of what many entrepreneurs experience on a day-to-day basis.
Many businesses have collapsed because their customers did not meet up with the agreements. And without written contracts, that can be enforced in the court of law, the entrepreneurs may have no way of recouping what is due to them.
But before we go further, let us clarify what exactly is a contract.
So what is a contract?
According to the Law teacher.net
A contract is an official agreement. It could be written or oral. Contracts can be written by using formal or informal terms, or entirely verbal or spoken. It is a promise made between two or more parties… Which allows the courts to make a judgment.
But While some business owners may shy away from the written contract. Contracts are an integral part of the human experience in or out of business.
Marriage, the bedrock of the family unit is a contract. And it is guided by the laws of the jurisdiction in which it is contracted.
Still, some marriages do come with a prenuptial agreement to make way for an amicable dissolution in case things don’t go as planned.
So if matrimony, which presumably involves people with emotional connection and familiarity, comes packaged as a contract, then it makes sense that business transactions (which may be among total strangers) enjoy similar safeguards.
The Holy Grail of Business Deals
You may classify contracts as the holy grail of business deals.
An important motif or document. A treasure with the powers to foster understanding, create a harmony of purpose, and resolve conflicts.
No matter what industry or niche, you operate in, you cannot avoid this important business activity.
Either preparing the contract documents for your customers or receiving them from those you are doing business with.
Unfortunately, many entrepreneurs do not attach any importance to the formal contract. It is often the least of their worries while sourcing for business or negotiating a transaction.
The desire to seal the deal, deliver, and get paid immediately, prods them to jump in and get going.
Many are content with verbal agreements. Hoping that the verbal agreement will stick.
Yes, indeed, verbal agreements are not unlawful.
But things don’t always play out as envisaged. And this is where a written contract with all terms spelled out (including payment deadlines) can save the day.
So what constitutes a valid contract? We will look at this in part 2 of this article.
But what is your take on the topic so far? Please share your thoughts so we can learn from one another.
Leave your comments below.
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