According to Artslaw, A contract is like a promise between people. It is an understanding, a deal between two or more people or organisations to do certain things. Each person or organisation who agrees to do something in a contract is called a party.
Many business owners find having a contract tedious and boring, they would rather just choose to believe that the business correspondent will keep their word. The truth is human beings are flawed but the law is concise, everyone is bound by it and it keeps everyone in check. There are many reasons why you should opt for a contract agreement for every business transaction, these 5 key reasons will help keep your business transactions safe
1. Contract Agreement Helps You Get Paid
If you don’t get paid, your business is affected negatively. It’s as simple as that, it also ruins further business activities. Drafting a contract lets your client know the parameters of the job you are supposed to deliver and the resulting payment plan. If a client defaults on payment, you are bound by law to take legal action against that client.
2. Having A Contract Agreement Provides Certainty
Agreements are reached every day, be it verbally, by email or by shaking hands. None of these is as concrete as a contract. A contract helps you know where you stand. It also helps you understand what is expected of you and how to navigate your responsibilities.
3. Contracts Help You Become a Better Client
Your business is also a client for some other businesses. In turn, you are being viewed by the other businesses you interact with, the same way you view your clients. When you have a contract binding you and other businesses, you know immediately what is expected of you. This helps you become a better client because you and your service provider have an understanding and a document you can refer to with all the information you need.
4. Contract Agreements help you minimize disputes
If you find yourself in a dispute with a client, having a binding document can come in very handy. Both parties can refer to it to see where either has gone wrong and who is liable for what. Before any party decides to sue, a contract can provide the option of mediation. This usually involves someone with legal knowledge, not necessarily a lawyer serving as a go-between. This can help to de-escalate the situation or resolve it completely.
5. A Contract Gives You Peace of Mind
Having a contract in any business transaction gives you overall peace of mind. It shows your client you know what you are doing and it helps you go about your work with the knowledge that you are protected. This is not to be taken for granted.