Why you need Agreements for your Business?

At one time, transacting business was easy. Two people agreed to make trading, and both the parties honored their word. But in the 21st century, professionals are too aware of the long history of deal breaking and lawsuits that have taken place all around. 

In business, Business agreements are vital because they outline expectations for both parties, protect both parties if those expectations aren’t met and lock in the price that will be paid for services.

• Having written contracts means that everyone knows what he is supposed to do and when, and makes it easier to resolve any disputes that might arise.

Outlining the Scope of Agreement

A Business contract is a written document between bith the parties that details the terms of a transaction. In a business, it generally defines the work that will be performed, along with the vital information like due dates, costs.

It can be easy to make your agreement far longer and complicated than it needs to be, but it is best for each party to try to keep it simple. Still, your business must include the following:

• Scope of work to be done (including the deliverables).
• General timeline, if possible include exact due dates for each milestone. Nothing that you discussed should be left in the agreement if you want it to be leagally enforceable.
• Payment amounts, terms. Number of days will the person have after delivery to remit that payment, and how will it be paid?
• The circumstances under which the agreement can be terminated, and how that will be handled. In case of dispute mediation, arbitration becomes necessary, the contract should also outline how it will take place?
• If necessary, one or both the parties may choose to include a noncompete clause or nondisclosure clauses.
• Any terms related to obligations. If, for instance, payment is not remitted by a certain date, the agreement should outline what will be the late payment fee applied.

If you can afford an attorney, it would be better to have one look over your agreement to make sure you have covered every clause. Once you have an initial draft, you should be able to update it with all your clients.

Protecting Both Parties

Although having expectations in writing a document increases the odds of success, it also makes legal enforceability easier. 

Simply knowing it is in writing can put pressure on all the parties who are involved to meet their obligations on time. 

The service provider will probably check the contract to make sure the work is going as agreed.

If an issue arises, having the contract in writing will make legal enforcement much easier. If the client decides to work with the different agency in middle of the project, the provider could take legal action to be paid for work that has been performed. On the other hand, if the service provider been forms poorly, the vendor will have protection against paying for the work done.

Locking in Financial Agreements

If written properly, your agreement will make sure the service provider receives payment on time. For big projects, this generally means multiple small payments as milestones are reached. 

For instance, A publisher buying an author’s book will often issue one advance payment when agreement is signed and another when the manuscript is submitted.

However, a written agreement may not always be enough to get payment on time. You’ll still have to raise invoices in many cases and re-iterate the terms on that invoice. Make it as easy as possible for your client to pay, offering many more options as possible.

Closing the Contract

Hopefully, you will never have to take any legal action based on the contract, which means the project will end and you’ll move on to the next project. Both parties should keep a copy of the contract on file for several years in case a later issue should arise. You’ll also have the template that you can tweak based on the lessons you’ve learned from previous projects.