Why Don’t We Use Contracts?
How many times have your built a website for someone, provided content for someone’s site, or did some type of consulting work without first signing a contract? If you’re like me, you’ve done these type of gigs – many, many times — for clients and/or have hired people without ever thinking about a contract.
Tons of entrepreneurs are doing it all the time. We’re taking on work over the internet and never seeing the face of a contract before we initiate that work. Most of us will work on a 50% deposit and 50% upon final delivery; or something in that area.
In most cases, I think that many of us never run into problems when conducting business this way. If you’re working with someone that you feel that you can trust — someone who has never let you down in the past – then a contract may not be necessary.
It’s just very interesting to see that many young entrepreneurs such as myself aren’t relying on contracts to conduct business over the net. And it’s becoming commonplace.
I guess it really comes down to using your own judgment of the situation and how much you trust the client or person you’re hiring. Ultimately, I feel that your best bet is to always go with the contract, but from my experiences, I haven’t always used one and have – maybe luckily – gotten by just fine.
I was motivated to write this article due to a client of mine who reneged on a $3,000+ deal. And I couldn’t help but thinking that if I had gone the contract route from the beginning, I could have had some legal power to work with. Though I did ask for a 50% deposit, which I attained during the initiation of the deal, I will now have to wait months before the client decides to “continue” the project on his own terms before I see any of the balance that he has owed my company for months.
When we get so used to things working out for us with clients, we sometimes become complacent and overlook all the negative possibilities of a deal going sour, and continue to conduct our businesses without contracts.
For many of us, we will continue to jump into deals without contracts and others will continue to use contracts for everything, no matter what the situation is. I still fall somewhere in-between.
What about you? Contract every time or sometimes or never?
9 Comments
Les Reynolds
October 16th, 2006 at 1:32 pm
I just started a web design business, and I have signed up one client so far. She is a friend, so I didn’t bother with one, but I’m looking into working up a contract. It takes a lot of time. I have found some good articles and sample contracts, but I guess it should go to a lawyer. But they are really expensive.
David Askaripour
October 16th, 2006 at 9:33 pm
Hey Les,
Yeah, if you trust her and things have been good up to this point, then you are probably just fine. But if you have the money, I would suggest getting that contract…or at least plan to get one down-the-line.
Could you please post the links to the information that you have found of the sample contracts; I’d like to share them with the rest of the Mind Petals community.
I wish you the best with your new client!
David Askaripour
October 16th, 2006 at 9:39 pm
I found this sample contract here: Sample Contract
It may help to get you started until you hire a lawyer.
Gyspy
October 16th, 2006 at 9:58 pm
Sample contracts that I have found (& bookmarked for my own personal use).
http://www.gallantrywebdesign.com/contract.html
http://www.wilsonweb.com/worksheet/pkg-con.htm
David Askaripour
October 16th, 2006 at 10:05 pm
Thanks Gyspy, much appreciated!
Gina Laverde
October 16th, 2006 at 11:15 pm
I’m the kind of person who wants to trust everyone, and just believe that we are all good honest people. I’ve rarely pushed the contact issue. In fact, a recennt client who burned me pretty much refused a contract. And I just let it go because I wanted to do the work and believed that since I knew where to find him — I would just get paid. No such luck!! So, I’ve learned the hard way that its worth the time to have a contract.
A contract just means that you believe enough in your work to insure that you will get paid for it. No honorable client should refuse to sign a simple contract.
David Askaripour
October 16th, 2006 at 11:41 pm
Hey Gina,
Yeah, I’ve been burned a few times myself — totally sucks! Spending the money to get a solid contract or even using a free one from the net is always a smart move.
Les Reynolds
October 17th, 2006 at 12:26 pm
Hi, sorry I left a comment and forgot to check back. I have bookmarked all of the resources I found at http://ma.gnolia.com/people/lreynolds/tags/contract
I hope that helps anyone.
Mind Petals: Young Entrepreneur Network » Blog Archive » Warning: Idea Thieves Come from the Best Places!!
October 17th, 2006 at 3:30 pm
[...] I suggest a verbal acknowledgement of the terms of your idea sharing. Let them know that you know your stuff and you cannot be taken advantage of. Get a contract!! After Dave’s article yesterday – I’m convinced that I’ll never enter another job without one. [...]
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