Business Bites Episode 132: How to Write Your Contracts

How to Write Your Contracts

Episode 132 on the Business Bites Podcast

The Gist Of This Episode:  As a business owner, you need to know how to write a contract. You can save money by writing out a draft of your contract to take to your lawyer for review and amendments. It also allows you to know exactly what is going on in your business. Listen to this episode to find out the parts that every contract should have plus some legal miscellany that is often left out of self-drafted contracts.

 

What you will learn:

  • why contracts are important
  • the minimum parts of a contract you should have
  • why you need to have a lawyer review all contracts you use
  • legal miscellany that is important to have but is often left out when self-drafting or using a lawyer that is not a contracts lawyer
  • and more!

Expand To Read Episode Transcripts

Written agreements with your clients or your customers creates legal protection for both of you. Y’all know this, you’ve heard me talk about it, but I’ve never actually sat down to walk you through how to write a contract.

Now here’s the deal. I’m not wanting you to DIY it, but I’m giving you this information so you can be the CEO of your company. Remember as always, you guys can head over to the show notes page, rachelbrenke.com/epi132 as this is episode 132, so get that up. You can get our guide, our freebies, and also start making notes because I’ve got some homework for you coming out of this episode.

Speaker 2:
Welcome to the Business Bites Podcast, the podcast for busy entrepreneurs, whether you’re an online entrepreneur or seeking after brick and mortar success, this podcast brings you quick bites of content so you can learn and grow anywhere you are. Now, here’s your host, Rachel Brenke.

Before we get into this episode, just an FYI. If you’re needing website template forms, such as terms, privacy policy, coaching agreement, anything that you need in running your business, we probably have it at rachelbrenke.com.

A lot of you probably listen on Apple or Spotify and you never actually visited the website but if you do, you’ll find we have a lot of lawyer-drafted, entrepreneur-approved legal documents to help protect your business. So we would love you to come check it out. Let us know if you have any questions, any requests, and as always dig into the Business Bites Facebook group, and you can see other people who have also protected their business with the Rachel Brenke brand and all the great resources and education that we have.

What up. It’s another week of the Business Bites Podcast and I’m your host, Rachel Brenke. This week, we’re getting into the nitty gritty of how to write a contract and I’m really going to focus a lot on the main services agreement. So if you’re a fitness business and you’re having athletes come into your business, or you’re a photographer and you’re doing photography sessions, whether it’s wedding or portrait, this is for you. You can adapt it, but here’s the big thing with this episode. I’m not wanting y’all to go in DIY into simply use it yourself. In fact, we have another episode that goes into all the dangers of self drafting contracts, which I will stick on the show notes page for you.

But the reason I’m walking you through how to write a contract is because I want you to have the checks and balances against the attorney you’re using. I want you to save a little money by drafting what you need ahead of time and having that lawyer go in and draft for you and just do small amendments and also so you know exactly what’s going on in your business.

Always have written agreements with your consumers, whether they’re a client, customer, whatever you want to call them because they create legal protection for both parties, the align expectation, and it also provides customer service. You should never go into any relationship without some sort of written documentation. As always, like I mentioned, we recommend the use of an attorney or our already done for you templates because you’re the owner of the business. You should have a knowledge of what goes into it, but we can help you with the tools there of getting you part of the way.

No matter what I am not recommending you use a contract without lawyer review. You don’t want to hurt your business or yourself because that defeats the entire point. So I’m going to run through quickly in this bite for you, some minimum key points to include in a main services agreement or really any agreement.

We need to have the name of the client. We need to have the address of the client, the legal name of your business and entity. So that would be like, what are you doing business as? You’ve probably set up as an LLC or a corporation because you’ve listened to the Business Bites Podcast and you know the need for liability protection so you need to put that legal name in there, such as the Brenke Group LLC, or the Brenke Group Limited Liability Company, and also partner that with our address. By having the name of both the parties and the address of both parties, we’ve identified both that are going to be bound to this agreement, who’s also going to receive the benefits of the agreement, and also who’s going to be obligated under the agreement.

Probably most obvious is we also need to have a description of the services and or the products to be provided. This is a phenomenal place for you to make sure you and your consumer are on the exact same page. Quite literally contract bound exact same page, because oftentimes in marketing, your consumer might see all of these different products and services and think that that’s what they’re going to get. But if you boil it down into one document, into one contract that you’re going to outline all of the description of the products and/or services to be provided, there will be no confusion.

You also want to include the amount and method of compensation in exchange for these services and/or products. Are you taking credit card, check? How much do you want to get paid? When do you want to get paid? All of that is outlined in there.

If you’re someone who’s like a services based business, you also want to include location details, such as date, time, the venue. Online, in person, whatever it may be. And of course, as always, we want to have a signature of the client and we also want to have the signature of your business representative, which probably is going to be you.

Now, this is just a skeletal foundation of what you need to start with. There’s a whole host of other things that you need to include. One of my recommendations, even if you don’t buy from me and one of my brands, is to skip over to the specific industry website that I have. So Rachel Brenke is for general entrepreneurship. TheLawTog® is for photographers. FitLegally® is for fitness professionals. I am more than happy if you’ll take a look at the bullet point inclusions that we have in the contracts in order to make sure that you have a well rounded contract.

As I’ve talked about in other episodes, having a lawyer is good. Having a lawyer that knows your industry and has worked on it is even better and that’s why we provide these template forms. Now, obviously I’ve gone over like the skeletal basics, but I want to run through some of the legal miscellany for you. I’m telling you guys what oftentimes, and I definitely harped on this and ranted on this in the episode about self drafting of contracts, but I can tell when y’all have drafted your own contracts, because you often leave out some really important legal miscellany such as what is the dispute resolution method going to be? What happens if there is a problem between you and the client? Are you requiring mediation? Arbitration? Are you going to go to court or not? You would have to agree to one of these methods and be in line with state law in order to make sure that you have identified the proper dispute resolution method.

Another one would be is where are we going to resolve a dispute? If it’s open-ended? I mean, there are a variety of options, but I’m not going to bore you with civil procedure today. But if you want to make sure that you, the business are able to control the time, money, and energy to have to defend or pursue on a contract, you’re probably going to make it in the location of where you’re living and/or doing business. You’d want to put that in the contract.

Another really important one is what is it called? A waivers provision. It allows for you to maybe waive like a material breach of the contract without waving the rest of the responsibilities and obligations. What does this look like, is maybe your client needs to pay you on a payment schedule and they miss one. Because of COVID, life happens and you want to wave it and that’s okay. You allow them. That’s all right, Sally, you can pay me again in a week. The waivers provision allows for the remainder of the contract to remain intact so you can still move forward with the relationship.

And probably one of the most important is an attorney’s fees provision. This guys, friends, gals, men, whatever, listening, understand in America, which is where I’m based and that’s when I’m talking, especially with this Texas accent, you cannot get attorney’s fees in court just because you win. It doesn’t work like that. It’s one of two ways. Either it has to be contractually agreed to, which is why we’re talking about it here, or it needs to be some sort of prescription in the statute, the law, and typically under normal standard breach of contract cases there’s not something that’s going to apply. So the best place is to put it into your agreement, that if you have to pursue your client for breach of contract, and don’t say you won’t, you never know until you have to, because you never have an issue until you have an issue, you want to make sure that it’s in there.

I think the most important thing with contracts besides the fact that it’s setting expectations, is reducing potential for miscommunication besides giving the foundation for customer service is that it is a standard. It is the minimal bar of what each of you have to do for one another. You the business, and also the consumer that’s entering into the contract with you. You can always go above and beyond.

So just think about that when you’re sitting down and drafting up the business policies that you have and the things that you want to provide and things that you want to protect within your business, we want to put the minimum amount in the contract. You can always go above and beyond that for your clients. It allows you to have customer service.

So obviously everything I’ve brought to you today are not the be all and end all depending on the industry that you’re in, there’s going to be other specifics, but these are the structural basics that we need to have in a contract, no matter what, and really the legal miscellaneous section is really what I wanted to do this whole episode for, because I see so many of y’all that are either going to really bad attorneys because they’re not contracts attorneys or you’re self-drafting them yourselves, and you’re completely leaving them out and you’re really leaving yourself completely open to being in a position that you may not be able to enforce your contract and you won’t have one to enforce at all.

So this was a nice little quick bite for y’all this week on how do you write a contract. As always, please reach out. Actually, what I really want you to do is join us in the Facebook group Business Bites, because we’re going to start a thread as we do for every episode and we’re going to invite everyone to talk about their contracts, how they developed one, and also maybe some scary stories that their contracts were able to eliminate or prevent because they had those measures in place.

So I invite you guys to jump over there and make sure that you are integrated in our awesome community and I will be back next week.

Speaker 2:
Thanks for joining Rachel on this episode of the Business Bites. For show notes, a list of recommended tools or referenced episodes, you can find them at businessbitespodcast.com. Until next time.

About the author

Hi, I’m Rachel Brenke

Rachel Brenke

I hope you are enjoying the Business Bites Podcast.

The goal is to grow your business in 10 minutes an episode.

Don’t put off business education due to lack of time.

 

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