Business

Contracts Mistakes You Could Be Making

Contracts are an important part of business, but they can also be a source of problems.

Whether you’re hiring new employees, signing a partnership agreement or selling your product to a new client, it’s important to understand the common mistakes that people make when writing contracts.

Here are some of the most common contract mistakes you could be making:

Not setting expectations early

The most important thing to remember when it comes to contracts is that you need to set expectations early. This means that you should have a clear understanding of what the client wants, but also what they are willing to pay for it.

For example: if you’re working on a website redesign and the client wants three color schemes and five different layouts, then they probably aren’t going to be happy with just one design unless they are paying extra money for it. On the other hand, if you give them two color schemes and four layouts (which might be more than enough), then your job will go much smoother because there won’t be any miscommunication or frustration between yourself and your client when changes need made later down the line due to lack of clarity over what was expected from both parties at the beginning.

Not reading the contract thoroughly before signing it

This is probably the biggest mistake people make when signing a contract. It’s easy to get caught up in the excitement of signing on the dotted line and forget to read through every page carefully. If you don’t take the time to read through everything, you could end up signing something that doesn’t benefit you at all — or worse yet, something that hurts your business!

Not defining terms clearly enough

If you want your contract to be valid, it needs clear and certain terms. If you’re not sure what these terms mean, then ask someone who does — like an attorney or an accountant. This will help ensure that your business is protected from any possible disputes down the line.

Thinking contracts are set in stone

When you are preparing a contract, it’s important to remember that the document is not set in stone. Contracts are simply a way of formalizing an agreement between two parties so that both sides know what they’re getting into and how they can expect things to go if their relationship goes south.

If your client changes their mind about something after signing the contract, then you can renegotiate or change it–but only if doing so doesn’t violate any other clauses in the document (for example, if there was one specific clause stating that no part of this contract could ever be changed).

Being unclear on deliverables

If you’re not sure what your deliverables are, it’s time to clarify them. If the contract doesn’t outline clearly what the client expects from you and when they expect it, then this is where you need to step in and take charge of the situation, especially when it comes to construction and similar works. Sometimes it’s really hard to put everything you think on paper, so it’s best to involve a solicitor in Tamworth or Sydney. This will ensure that everything goes smoothly and without problems.

When negotiating with a client or employer, there are certain things that should never be up for debate:

  • What the deliverables will be (and whether they’re part of your job description)
  • When those deliverables need to be completed by (and how much time there is between now and then)
  • Who will be responsible for completing each aspect

Confusing business with friendship

One of the biggest mistakes you can make is confusing business with friendship. This can happen when you’re dealing with a friend or family member, who may be more inclined to give in on some points and not ask for what they really want. But if you don’t set boundaries, it’s easy for these relationships to turn sour and cause major problems down the road.

To avoid this issue:

  • Be professional in all communications with clients–even if they are friends! If something comes up that makes it difficult to be professional (like asking questions about their personal life), try changing the subject instead of bringing up personal details yourself.
  • Don’t let emotions get in the way of negotiations; keep focused on what’s best for both parties involved in any given situation at hand. If there are any emotional ties between client/customer/vendor/etc., keep them separate from business dealings as much as possible so everyone involved feels comfortable being honest about their needs without worrying about hurting someone else’s feelings or upsetting them unnecessarily by saying “no” when necessary.

Not negotiating terms and conditions

Negotiating the contract terms and conditions is an important part of the process. You may not think you have much power, but there are several things you can do to make sure your interests are represented in the final agreement.

  • What are the key things to negotiate? The answer depends on what kind of contract you’re working with and what your goals are for it. If you’re signing a lease for an apartment, for example, one thing that might be important is whether pets are allowed (and if so how many). For another example: If you’re buying a car and financing through a bank or credit union instead of paying cash, one thing worth thinking about would be whether or not there’s any penalty if payments come late–and if so how much that penalty will cost per month (or year).
  • How do I know what’s negotiable? Most contracts contain boilerplate language which has been adopted by many different companies offering similar services/products; however some companies may have additional clauses added into their documents while others don’t include certain things at all! This means if something doesn’t seem right then ask questions before signing anything!

As we’ve seen, contracts are not just about the business relationship. They can also be a way for you to set expectations with your clients and ensure that everyone is on the same page. By being clear from the start about what you want from each other, both parties have a better chance at success in their project or partnership together.

Mike Parsons

Mike is an Australian business consulting specialist. He’s working with companies that outsource their IT maintenance. He often writes about technology, business and marketing and is a regular contributor on several websites.

Mike Parsons has 52 posts and counting. See all posts by Mike Parsons

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