3 Unexpected Reasons You Need a Contract

One thing we almost always recommend to new business owners? Have a contract. Are you surprised, seeing as how we’re named The Contract Shop®? Didn’t think so. 

Unfortunately, we do see a lot of newbie entrepreneurs brush the necessity for contracts off, for reasons like “I’m doing this for a friend” or “it’s a super quick project.” There are some well-known reasons why you need a contract (that we’ve discussed on the blog before) but there are a few that you may not have expected…or ever thought about.

You already know you need a contract because…

If you’ve browsed around our blog before, you probably already know that we recommend having a contract for a number of reasons.  Six, in fact.

A contract inspires trust in every new client or customer you work with. Think they’ll get scared off if you ask them to sign one? That’s  probably a red flag that they’re not to be trusted themselves. An honest client will be relieved that you’re serious about protecting their investment.

Contracts protect your customers, but they also protect you! They outline expectations for your working relationships from the beginning, so there’s no surprise about the hours you’re putting in or what you’re doing. Contracts also get you paid on time. Very important.

And finally, contracts can back you up should things get serious and head toward a lawsuit. For one thing, they establish liability ahead of time  in case of cancellation or refunds. And for another, they eliminate any he-said-she-said bickering…because it’s all in the contract.

These are the big reasons you need a contract for your biz, but there are a few more you may not have even considered.

The person you’re working with changes

Let’s say you agreed to  work with a new client because 1) it’s what you do and the money couldn’t hurt, and 2) the person who hired you was so dang likable. You and your new client hit it off, and the start of your project is running super smoothly.

But then, they get laid off. Or they accept a new job halfway around the world. Or they sell their biz to someone else. And you’re left working with a totally new person who’s not as cool. Or no person at all.

This is one example of why you need a contract that specifies  who  you’ll be working with and for how long. If that may change in the future, build solutions into your contract just in case.

Someone tries to copy or share your work

Ever had a client share a template, process, or other resources with someone else…even though you made it specifically for that one client only? Ugh. We hate that this is a thing, because  copyright infringement and intellectual property theft sucks. 

It’s yet another unexpected reason you need a contract, though. A contract allows you to make it very clear who your work is intended for. Your work is unique and valuable, and it shouldn’t get passed from one person to the next as if it’s free.

Your client wants to take control 

“Let’s just stick to a verbal agreement,” they said. “No need for a formal contract, we’re all good,” they said. When you’re just starting out, it can be tempting to go with what your client wants so you’re seen as more agreeable. But this can come back to bite you in the booty.

If  you  don’t make the rules and set expectations from the get-go, your client may do it instead, without warning. Suddenly, you’re stuck with  a client from hell who pushes your boundaries, pays late, and sucks up all of your time.

You need a contract to nip this issue in the bud. With a contract, you can outline what each party is responsible for, what you’re working together on, and what happens if someone drops the ball. 

Play it safe by using contract templates

You never know what might happen when you go into business. Your precious resources might get passed to a client’s colleague or friend. A new client may start demanding outrageous things of you. (Working in the evening on a weekend?? Hard pass.) Or your original client may hand the reins over to someone else who’s not as pleasant.

That’s why you need a contract. A contract minimizes any risks both you and your client may come up against. It protects your client’s investment (their money) as well as your investment (your time, intellectual property, and sanity).

Did we convince you to invest in a contract for your business? Cool. But now that you’ve decided to get one, you’re faced with another question. What kind of contract do you get??

The Contract Shop® has you covered, friend. Whatever biz you’re in, whether it’s coaching or photography or interior design, we have a contract template that’s attorney-prepared, peer-reviewed, and legally legit.  Find the perfect contract template for your business today in our shop!