CONTRACTS VALUE 7:1

Ten Reasons Why You Need a Contract

We understand that the law can appear boring and confusing, but would you use this as a reason not to protect your business? Legally, you don’t need to have a set of terms and conditions for your business, but it would be foolish not to – you should never do business without them.  We have put together a list of the top ten reasons why your business should have a legal framework in place.

  1. A contract will help you to navigate the law

Many people find the law complex and confusing. A contract will help to make the law more accessible and allow you to navigate it correctly. It’s extremely common for businesses to fall foul of the law because they don’t understand it, so a contract drafted by a specialist will ensure that you always stay on the right side of the law. Of course there are DIY contract templates available online, but these will not reflect your business and offer you full protection.

  1. A contract helps you to get paid

In your list of business priorities, getting paid will be one of the top, so if your clients don’t pay then you lose out.  A contract can communicate to clients when they can expect an invoice and when they need to pay their bills. Should they decide not to cooperate, the legally enforceable contract will support any legal action you take to recover the debt.

  1. A contract helps to minimise disputes or problems

Whilst a contract won’t completely stop disputes or problems, a contract can help to minimise them. Should you have a dispute on your hands a contract can help to protect you in many different ways. It encourages your client to cooperate, but if this doesn’t happen a contract allows you to mediate to try and resolve the problem, rather than paying expensive legal fees. Of course if mediation fails then the contract is a legally enforceable document so it will support you with any legal action or debt recovery.

  1. A contract protects your intellectual property

Protecting your business and its assets is extremely important. Intellectual property can often confuse clients because they believe they have full ownership once they have paid for a service. This is incorrect so a contract will communicate how the intellectual property is to be used. It’s a valuable part of your business and you need to ensure that it cannot be stolen or misused.

  1. A contract limits liability

A legal framework helps you to manage your business and limit liability. It helps to resolve disputes, helps you to get paid and protects valuable business assets.

  1. A contract creates certainty

Yes things can be agreed verbally, or by email, but how much legal standing do they have? The answer is very little. A contract will outline the operational and sale processes of a business and explain how the customer or client can use the services. By communicating this information you are creating certainty – all parties know how to act and what is expected from them.

  1. A contract provide in-depth coverage of your business

A contract will help your clients to understand your business, how it works and how they can use the services. It will provide an understanding of your operational and sales processes so that clients can manage their expectations. It’s good business practice to communicate with your clients.

  1. A contract helps you to give good customer service

Should a client have a problem, they can refer to the contract and it will give them all the information they need to try and resolve it. It will explain returns, refund and repair policies, warranties, intellectual property, and complaints procedure – all the things a client needs to know! By providing this information in a document that can be referred to, the client will feel they are getting a good service.

  1. A contract helps to build trust and give peace of mind

By putting a legal framework in place you are showing clients that you care about them, as well as your business. A contract gives you and the client peace of mind because you know any transactions and work are protected. By providing this to clients you are allowing them to have trust in the business.

  1. A contract allows you to manage expectations

When you communicate the terms and conditions of sale to a client you then have the ability to manage their expectations. A contract will communicate all the information they need to do business with you, so they understand what to expect. Managing your client’s expectations allows you to give them good service and encourage them to use your business again.

If you don’t have a legal framework in place for your business, why not? It will allow you to grow your business, keep clients happy and protect the future of the business.

Why Are Contracts Valuable? The Value of Contracts in Everyday Life

Franchise Contract

Contracts are valuable in everyday life. Contracts tell people how to act and ensure that a person receives what he or she thought he or she would receive in exchange for some action.

No one wants to take a job, work for a month, and find out they aren’t actually going to be paid what they thought they were going to be paid. No one wants to call the cable company and ask for a package with 100 channels, pay for the company’s services, and find out after the cable employee leaves that you will only be able to receive one channel.

How Do You Prevent Being Duped?

How do you prevent this? Most of the time you can’t make a person do something they did not agree to do.

If you have a contract, however, you have the other person’s promise to do something. If the contract is clear, you have the other person’s promise to do exactly what you thought he or she was going to do.

Contracts Provide a Remedy

People will always break contracts, and litigation will ensue. The beauty of a contract is that you have a remedy when people break their promises. You simply need the promise before you can get the remedy.

Contracts are only promises to act, or refrain from acting, in a certain way. With the exception of promising to engage in illegal conduct, you can exchange promises of any kind you want. Creativity solves a lot of problems.

Verbal Versus Written Agreements

The more clear your promises, the less likely there will be misunderstandings and lawsuits about the contracts. Verbal agreements are valid contracts just the same as written agreements are valid contracts. However, verbal agreements are much harder to prove, and therefore much harder to enforce.

Elements of Contracts

All contracts have three main elements:

  1. Offer
  2. Acceptance
  3. Consideration

Offer

An offer is an expression by one person that he or she wishes to enter into an agreement with another. An offer is what is proposed to the other person.

If I ask you to take my aunt to the doctor in exchange for me babysitting your kids, I have made you an offer.

Acceptance

Acceptance is an agreement to the offer. Only the person to whom the offer was made may accept the offer. The person to whom the offer was made must accept all of the terms of the offer. If not, the person has not accepted the offer.

If a person proposes any different terms than those in the original offer, the person has not accepted the offer but rather, has proposed a counter offer. Now the original offeror may accept or reject the counteroffer, or new offer.

If you agree to take my aunt to the doctor if I babysit your kids, you have accepted my offer.

Consideration

An offer and acceptance must provide consideration. Consideration is what each party gives up in making a contract, in exchange for the benefit of the contract.

The consideration I am giving in the above example is that I will babysit your kids. The consideration you are giving is that you will take my aunt to the doctor.

Some consideration must be given by each side in order for there to be a contract. However, the value of the consideration does not need to be equal. Courts will not engage in weighing of amounts of consideration.

You Probably Enter Contracts Every Day

With an offer, acceptance, and consideration, a contract has been created. You make many, many promises during daily life that actually form a contract.

Published by Eaugrads

Evangelical Alumni Foundation seeks to fulfill "The Great Commandment and The Great Commission" to GOD's great economy. Each of us has great purpose as Sons of God. We are many in one body. Together, we are firmly planted by streams of water to bear fruits in all seasons. We shall not lack no good thing. Deuteronomy 1:11 God's Spiritual Billionaire's! Brief about our founder of Eaugrads: "JESUS"... "His pursuit of us is Relentless, His desire to Fight on our behalf is never ending; Despite the day to day distractions, designed to stop us from reaching our destinies, we can be sure of this... what God starts; He Finishes." Amen! T. Harris, LLD

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