You run a business and want to be sure that it is successful. When you negotiate contracts with vendors or others that you want to work with, you need to know that the contract is beneficial, binding and protective.
There are some red flags that you can look for while you sort out your contracts. If you see them, then you may want to take your contract back to your attorney for more negotiations or walk away from the business agreement if it won’t benefit you in the long term.
3 basic red flags in contact negotiations
There are several contract red flags that should signal to you that a contract needs more work. Here are three that come up often.
- No explanation of the scope of service. While a contract doesn’t have to be long, it should be thorough enough to go over what services will be performed. It should go over the expectations of each party as well.
- No schedule is set. In your contract for services, you should always have a performance schedule set up. That means that you and the other party should have dates or timelines for services to be performed within. Then, if someone doesn’t meet a deadline, there can be steps taken based on the terms of the contract.
- No fee schedule. Another issue that could come up is a problem with payments. If there is no fee schedule listed, then you need to write down rates or the obligation to verify rates before certain services are obtained or completed. For example, you may agree to hire in a contract worker for $50 an hour. This should be written on paper. Otherwise, the amount to be paid could be misunderstood or lead to a conflict later on.
These are three issues that should immediately make you think to renegotiate or work on your contract further before agreeing to it. If you don’t take care of potential issues in advance, you could end up signing a contract that isn’t as clear as it should be and that leads to legal trouble in the future.