Contracts are legal agreements that must be taken seriously. Legal remedies may not be available if you break them. But what happens if you just forget about your contract? If you don't look into the specific details of your contract, the points below highlight the most common mistakes made by typical customers when signing a contract online.
1. Not having a lawyer read it over
This one can be tricky, as most people don't want to spend the money on legal fees. However, if you're entering into a contract that will potentially involve a lot of money or is something that's important to your business, it's worth it to have an attorney look over your contract before you sign. You don't have to use the same attorney for every situation, but it's important to have someone who knows the law look at contracts from time to time — especially if you're unsure about something in the contract or if you have questions about things like liability or risk management.
The same goes for any other type of contract. If you're entering into a deal with another company or individual that involves money, it's worth it to have an attorney look over the contract before signing.
2. Forgetting to update an agreement.
Your business may be growing rapidly, but your original contract may not reflect this growth. As your business grows, you should update your contract to reflect the new terms. If you don't update it, this could lead to problems later on when someone tries to enforce a clause that no longer applies.
One way to keep on top of contract updates and renewals is to use contract management software that offers automated contract reminders. This enables teams to keep a close eye on contracts without having to dedicate more headcount to it.
3. Agreeing to big changes at the last minute
Contracts are meant to be a roadmap for your business and the client. They outline expectations, responsibilities, and deliverables. If you agree to change even one of these elements at the last minute, you risk creating confusion and more work for both parties.
If you agree to a client's request for changes, be sure to get them in writing. If they want something that isn't in the contract, ask if it can wait until after the project is completed.
4. Not putting things in writing
Contracts are like a marriage — they're not always easy, but the effort is worth it.
A contract is an agreement between two or more parties, which outlines the expectations and rights of each party as well as what happens if one of them breaks their end of the bargain. In other words, a contract is a promise that you make to someone else. The fact that contracts are so binding is why they're so important to have when you're starting a business or taking on any type of venture where others will be involved in your success or failure.
If you want to avoid problems down the road, you need to write everything down — from how much money you're going to make for what services, to what happens if one party fails at their obligations under these terms and conditions. If something goes wrong along the way and you don't have anything written down about what's supposed to happen next, things could get ugly fast — particularly if one side feels cheated by another.
5. Signing something you didn't write yourself
As obvious as this may seem, it's easy to forget that when someone hands you a contract, they have an agenda. They want you to sign on the dotted line so they can get what they want from you — whether that's money or a favor.
So before you agree to anything, make sure that you read through every section of the contract and understand what it says. If anything feels wrong or confusing, ask questions until things start making sense again. If the other party doesn't know how or isn't willing to explain it, walk away and reevaluate if this is really worth pursuing further.
6. Waiting until the last minute to negotiate
This is a common mistake people make when signing a contract. They wait until they have already signed the contract and then try to negotiate. The problem with this approach is that you've already agreed to the terms and conditions of your contract, so there's nothing else you can do but accept them.
Instead, start negotiating when you're just beginning to think about signing a contract. You'll be able to get everything you want and still have time to review it carefully before signing anything.
7. Not discussing payment terms with the other party
It's important to know how and when you're going to be paid. If it's not stated in the contract, you might end up waiting weeks or months for your money, especially if you're dealing with a new client or company that's unfamiliar with the process of paying freelancers. If you don't get paid on time, it can be hard to pay your own bills without your income.
8. Expecting a standard contract to work for everyone involved
There's no such thing as "the perfect" contract. Every client has different needs, and every situation is unique. If you're not familiar with the person or business you're partnering with, don't expect them to fill out a form and send it back to you just so you can get started on their project. Instead, ask what their specific needs are and how they would like to proceed before creating any documents or making any commitments on your end.
Conclusion
To conclude, no matter what you're signing, it's always a good idea to ask questions. Don't be afraid to ask what the terms "incorporation," or "mean in specific terms" mean. You don't want to enter into an agreement that you don't understand. Contracts are an important part of business, and you don't want to lose out on money from anything you're involved in.