Customer Contracts 101 - Davis Law Office

Customer Contracts 101

Customer Contracts 101

“I think I need a contract.” If there is one thing we hear a lot in introductory emails from clients, it’s some variation of this phrase. And guess what? The answer is nearly always…”yes, you do” or even more often “yes you did, quite some time ago.” But let’s say you’re not in this group, and you haven’t run into a situation where you wished you had come up with a client contract some time ago…why should you care about yet another thing to remember? Good question, and one we’re always happy to answer. Here are some of the biggest reasons having a client/customer contract can definitely make your life easier:

  • Set Expectations. We tell clients that contracts, particularly client/customer contracts, always need to cover a few basic things: who’s doing what, what will it cost, how long will it take and what will happen if someone doesn’t do what they’re supposed to. In other words, contracts are all about¬†setting expectations. The best time to set expectations is BEFORE you begin work and the best way to do that is in a simple agreement you present to every potential new customer.
  • Handle the Hard Stuff.¬†Getting a new client for your growing business is never easy, so when someone says “I want to work with you…what will it cost” it’s understandable that many of us hesitate before answering. You don’t want to say something that will scare the new client away, but you also don’t want to leave money on the table. Doing some research in your industry and setting a minimum amount you’ll work for in your contracts can often make this conversation a lot easier.
  • Prepare for the Worst. One thing most attorneys don’t stress enough to clients is that no matter what your agreement says, if the party on the other side wants to breach it, they will. Though it’s not that common, breaches can and do happen all the time. However, if you’re using a well-drafted agreement, you can define what will happen if a breach does happen. From a client’s failure to meet a deadline to their failure to pay an invoice, if you draft the agreement, you set the terms of what happens if….
  • Get It Paid For. So the worst has happened, and a customer isn’t paying your invoice. You’ve set the terms and said you can now stop working for them. But what about collecting what is already due? A vital term to include in any form customer/client agreement is an “attorney’s fees” provision. This allows you to collect, not only what the non-paying client owes you, but also all of your fees related to collecting that money. And it can often coax a reluctant payer to pay you if you remind them of this term’s inclusion in your contract.

Convinced that you need a contract? Still wondering how it might help you? We’d love to chat with you about it. We offer free consultations, so drop a line and let’s set up a time to chat.

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