Whilst you can have a verbal agreement, it is always better to have a contract in writing. Having it formally documented helps each person understand their responsibilities. It creates certainty. Even though you can enter into a contract verbally without anything in writing, running a business means you are likely to be dealing with lots of people, and you would have to remember all your oral agreements. They are also more difficult to enforce in court because there is no written record of the agreement.
It’s also important to ensure that it is written by a lawyer. A lawyer understands the language of contracts, and how that language would be interpreted by a court. They also know how to minimise the legal risks and how to draft contracts in your favour.
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Well drafted contracts will help you get paid
Lawyers are experts in drafting contracts, and one of the most vital arrangements you have with your clients or customers is the way you get paid. A properly drafted agreement will define fees, including any cancellation fees or penalties and payment arrangements, and make these terms legally binding.
We helped Bridget by drafting a contract for her which included benefits for those clients who paid on time, penalties for late payments, and cancellation and refund terms that benefited her business. It meant that her clients were legally bound by the payment terms, and she could direct them to the agreement when there was any uncertainty. Her business has run much more smoothly as a result.
Agreements drafted by a lawyer will help you enforce promises
When a lawyer drafts a contract, it inevitably includes various promises that are made between you and the other person. When we run a business we need to make promises with many different people, suppliers, clients, contractors, employees, perhaps also ambassadors or influencers. The promises can include things like, they have to give you various information to do a job, or that they have to give you access to certain software – the list of promises you can make is as long as your imagination! A well drafted contract will ensure these promises are legally binding, so if the other party breaks the promise, you can rely on the contract to resolve a dispute, and even sue them if necessary.
We helped Anna with various contracts for her marketing business. Her contracts included multiple promises by her clients, like that they needed to give her content, they needed to be on time for photo shoots, they needed to respond to requests within a certain time, and many more. It included agreements with shareholders of her company about what decisions could be made in relation to the management and direction of her business. And further contracts with photographers who needed to assign their copyright over, influencers who needed to post on time, copywriters who needed to be drafting original content. Without these promises written into well drafted contracts, her business would have been very hard to run effectively.
Legal templates can be dangerous
Ignorance is no defence in the law, and using a template can mean that you are leaving an opportunity on the table, obligating yourself to something entirely unnecessary, or even missing important clauses relevant to your industry. Template contracts also aren’t tailored to your specific situation, and often the costs down the track will far exceed the initial cost of hiring an expert contract drafting lawyer to do it right the first time. We’ve seen some people using templates that result in completely different legal consequences than the ones that they intend.
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Please message us so that we can help you with your contract drafting.