THE POWER OF THE “C”
Have you ever had a client or customer request a service or product from your small business, but for some reason or another failed to follow through with completing their payment for what they requested of you?!?!
The truth of the matter is, this is very common in business. I’ve know quit a few people who fell prey to people or other businesses that have tried to take advantage of the goods or services they were offering. How does one limit, or better position themselves should someone fail to follow through with full payment for a good or service? It’s all in the Power of the “C” – A CONTRACT!
Just as incorporation documentation is vital to the development of a business, so is a contract! Every business should have some sort of template contract drafted and ready to be customized prior to entering into business transaction. A contract is a legally binding document entailing the set of promises or agreements between two parties. Should someone breech the terms of the contract, it positions you as the business owner to pursue legal action to obtain what was agreed upon.
There are four basic elements to a contract:
- An agreement needs to be consensual between parties, followed by an offer an acceptance;
- The parties promises must be supported by something of value, known as consideration;
- All parties must have the capacity to enter into a contract; and
- The contract must have a legal purpose.
(Bagley and Savage, 2010)
There are so many other components to a contract, and what is listed above is the bare minimum. Additionally, laws concerning what constitutes a binding agreement vary from state to state. Furthermore, there are legal nuances that can allow one to exit a contract under justifiable circumstances. Nonetheless, you should have one drafted for your business to protect yourself.
If you do not have a contract written for your business, I want to encourage you to do so today! If you need consultation to draft a simple contract, you can contact me at (786) 766-0776 or by email at email@example.com. For more extensive contracts, you should contact a lawyer.
Constance E. Bailey and Diane W. Savage. Managers and the Legal Environment. 2010.
Ohio. South-Western Cenage Learning.