Running a business requires you to enter into contracts with suppliers and clients. When entering into an agreement with a client, there are certain factors necessary to consider to ensure business success. Below, we break down five key tips to ensure your agreements are binding, and your business is successful.
Review your client’s history
Before engaging in a contract with anyone, it is necessary to review their history. Doing so can provide you with knowledge of their habits and previous business relationships. Furthermore, it can tell you if they’ve had contract issues in the past. Understanding these factors is important, as it ensures you’re engaging in a contract with someone who will uphold their obligations.
Ensure your business is stable
When entering into an agreement with a client, a common mistake company’s make is to only research their client’s. Whilst you might ensure that your client can meet all their obligations, it is equally important to ensure you can satisfy your obligations. Particularly important for longer-term contracts, it’s critical to know if your business can meet these obligations required in the future.
Have a written contract with your client
Whilst oral contracts may be enforceable, they can also be challenged. It is difficult to dispute a written contract, unless there are mitigating circumstances (such as the fact that it is illegal). A written contract provides clarity for both parties, and ensures disputes may be handled accordingly.
Negotiate with your client
Negotiating is a critical part of the contracts process, to ensure that your business receives the best possible deal. Whilst a client may come with a standard offer, it’s important to view it with an open mind. Adjust it reasonably to ensure the terms suit both parties. If the contract doesn’t suit your business and the client is unwilling to negotiate, it’s best to walk away.
Dispute resolution and termination clauses
Getting married and entering an agreement are similar concepts. At first, everything’s wonderful and working well. However, relationships/contracts occasionally experience trouble, or end. Having the ability to resolve or leave an agreement is critical to ensuring your business is not harmed. It is recommended to have clauses outlining dispute resolution methods and termination procedures.
Final thoughts
Entering into an agreement with a new client is often exciting. However, it’s important to ensure your the above tips are followed, to make sure that your business and new-found relationship is successful. For an example of an adequate agreement, this services agreements may provide useful. For further enquiries on the topic, a contract lawyer may be able to assist.
