Business has changed. Small businesses are more independent. Email is king. Meetings are rare. It is not uncommon for employees to bring their on devices. We live in a do-it-yourself economy. We also live in a well documented economy.
Our Incessant Emailing Can Help Create a Contract
It is always best to have an actual contract that is signed by both parties. It is best to make sure that your contract covers the what-ifs. You are in a stronger position when you do, but sometimes you don’t have the contract.
Perhaps you are an online business that does not do a lot of written agreements. You needed some short term help, so you hired an independent contractor to help you out and do some work for you. You knew the guy and he came highly recommended. You have never worked with independent contractors before and you did not have a contract you could send to him. You thought it would be fine this one time. He worked along for a couple of weeks and sent you an invoice and some work product. The work product was okay, but the invoice was three times what you were expecting. Are you just stuck because you didn’t get it in writing?
Did you have any conversations with the contractor about price? That may not be terribly helpful because he may remember them differently. He may claim you did not settle on firm numbers. Did you, however, send an email confirming your understanding of your agreement? Perhaps an email that stated how much he said he would do it for and what you expected from him?
Contracts have elements they must meet to be enforceable.
If you have documentation of your agreement, you may be able to argue against the large invoice. You may have to pay the agreed upon price, but it could save you from the unexpected bill. He will have a difficult time proving how he is entitled to the extra amount. With the emails to back you up, you could start with a conversation with the independent contractor. Question why he quoted you a price and did not mention he was going way over the quote. Be reasonable, but don’t be run over.
Make sure, even if there will be a contract signed later, to document the agreement (and your understanding of the agreement) throughout the process.
Even if you do plan to get a formal contract, it helps to have the terms of the deal outlined in correspondence (email is okay) until the contract is signed. In small businesses, deals come and go before the contract is ever signed. This is not the best way, but it is how startups work. It helps to have something documented while you put together the formal contract.
Typically, contract negotiation is about the what-ifs. It is not about the major terms. Especially if lawyers are involved.
Having your agreement detailed in some kind of written form (especially if you have a confirmation from the other side) may create an enforceable contract. This is especially important if your contract is worth more than $500 or involves work that will last more than a year or real estate (those agreements can’t be oral). This written contract may not help you in more extreme what-ifs, but it may help in the more common issues like money and product.
It is always best to have a formal contract, but if you didn’t you may still be able to protect yourself.
Make sure you document all of your agreements in some kind of written communication.
Even if it is going on right now.
Send an email to your client, contractor, vendor or anyone else and outline your understanding of the terms. Ask them to confirm. Go ahead. It may be the most important thing you do in your business today. Then come back for one more tip.
Get to work on your contract. You work hard on everything else in your business. You should document every relationship you have in your business. Study how to write contracts. Hire a lawyer to help you. Write one yourself, and pay a lawyer to review it. Whatever you do, make sure it will protect your business. Make sure it works for you .
Let me know if you have any questions while you work on it. Leave a comment. Send a voicemail (over on your right). Join the Conversation. I am here to help you protect your business.