Memorialize that Deal in Writing!
You’ve finally sealed the deal. Encapsulated in a state of euphoria, you look across the table at your new client. Wine glass in hand, you propose a toast to the new relationship. Your glasses click in unison. Merlot has never tasted better.
The next day, your new client calls requesting that you start shipping his widgets immediately. Eager to please, you do just as he asks; and, you decide that you’ll temporarily disregard the fact that he hasn’t signed a contract just yet.
Besides, you reason, your attorney will take forever to draft it (and right now, you really don’t have time!). Eventually, you’ll get around to calling your attorney . . . he’ll draft “something” and your client will end up signing it. Everything will work itself out. Why worry?
I apologize in advance for spoiling your presumed happy ending. But, if I continue to narrate this scenario, it will be sometime in the future, thousands of dollars later, and you’ll be sitting in a courtroom listening to your attorney hash out the terms of your so called “agreement”. Unfortunately, no contract was ever signed. You were too busy (or careless) to call your attorney to draft it.
Entrepreneurs, save yourselves from future headaches! Ask your attorney draw up a contract immediately after the “toast” or the “handshake”. I understand it is one more step and it costs money. But, it is a necessary step that you should take very seriously because it ensures that both parties are aware of their rights and obligations and provides a remedy if either one of them does not honor the terms.
So, learn from countless numbers of entrepreneurs before you: memorialize every single deal in writing. There is no better practice.
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