What Makes a Good Contract?

Contract negotiations tend to be a very busy and interesting time in any project.  A good contract builds the relationship you have with the client along with ensuring a level of quality in your work.  Too many people breeze past the contract thinking that getting the work is good enough, and I am hear to tell you it has been our experience over the last few years that it is in fact, not good enough.  So what makes a good contract?

1)  Lawyer Approved.  I get that most people don’t like going through the legal system and that working with a lawyer can seem intimidating and costly.  Shop around for a lawyer before choosing one.  Most will offer the first hour of consultation for free as a “get to know you” period.  Once you have selected one, have him/her/them approve the contract you are working on with your client.  It might seem like a big expense upfront but it will pay divedens down the road.

2)  Mutually Beneficial.  A good contract will protect you and your client.  This is a tricky point in that most corporations will not be looking out for your interests so you need to make sure if you are working with a corporate contact you are protected.  If you are the one writing the contract do yourself a favor and write in language and stipulations that take care of your client’s; everyone will appreciate it in the long run.

3)  Project Specific.  Unless you are working under a general retainer, which still requires a strong statement of work, (SOW) then write your contracts to be specific to the project.  Make sure your SOW is as detailed as it can possibly be as to not create confusion while in a project and let the supporting language support the mission of the project as a whole.

4)  It Protects You.  Of course this point seems like a no-brainer and the point about a mutually beneficial contract seems like it should cover this point, but in reality in needs to be stated on its own.  Make sure your contract protects you and your organization.  In todays business climate it is the norm to see legal action taken against companies when one entity feels like they were wronged in some way.  Protect yourself!

If you can’t get the language written the way it needs to be written to make these points a reality then tread very lightly.  The cost of doing business can be extremely expensive and if you enter in to a legal relationship with an organization that makes your company’s life a nightmare you will most likely end up paying out of pocket to work on the project.  Do not be afraid to walk away.  I know how challenging it can be when a seemingly great opportunity is sitting right in front of you but sometimes saying no will be the best decision you ever make.

There are some good resources out there to help shed light on the topic.  A law firm, Opton & Galton have a nice summery and Entrepreneur has a good article on finding a lawyer.