A Written Agreement 101
Last month we discussed the validity of an oral agreement. We concluded that although oral agreements are just as binding and valid as written agreements, they are nearly impossible to enforce, as there is no substantial (and impartial) evidence to produce in court, detailing the terms of the agreement. For this reason, it is always a clever business move to make sure you have at least the basic terms of the agreement written down or typed out. We look at the ins and outs of a written agreement.
You don’t have to pay someone to draft a 60-page watertight contract with all kinds of intricate clauses. (You could, of course – but it’s usually not necessary.)
What you need is just a basic, detailed description of the work to be done, payment information, timeframes, and cancellations options.
You can do this in many ways – actual paper and wet signature or electronically, through an email with a confirmation of receipt and acceptance of terms message. In a pinch, a WhatsApp message, clearly drafted with proof that the client saw it, can even be of value.
The Basics
The basics information that a written agreement needs, to be of value to your business, includes the following:
- A clear description of who the parties to the agreement are.
Name and ID number for individuals. Company name, (or trading name), and registration number for larger businesses.
- A clear detailed description of the goods or service to be delivered or performed.
This is important because a client might brief a couple of different people before settling on your quote and could lose track of the scope of work they discussed with each service provider. This clears up any confusion for both parties on what is expected.
- Information about the payment schedule, and how the payment must take place.
This gives you a foot to stand on when payments are slow to come through and the work falls behind because you couldn’t buy the necessary tools and products to stick to the original completion date.
- 4. A timeframe for 50%, 75% and 100% completion or delivery of everything agreed to under point 2.
This allows both you and the client to plan for the completion and get the necessary support in place. (E.g., How long does the client need to arrange supervision or access to their property for?) Furthermore, you can discuss penalties for late delivery, confirm commencement date and finalize daily working schedules.
- Conditions for cancellation or termination of the agreement
Here you can work in a notice period for cancellation of the contract and discuss who is responsible for which part of incomplete projects and how partial payment will work.
The Final Page
The final page of the agreement, (if you are using paper or email) is the space left open for the signature. You might miss out on this is if you use the WhatsApp messaging function only.
On this last page, you can also confirm that this written agreement encompasses the whole agreement, and any changes or amendments to it must be put in writing and signed by both parties.
We realize that this sounds like a lot of administrative hassle for a simple service agreement – but trust us: It won’t take hours and it is absolutely worth the 30min it takes you to sort out this side of your business.
Not only will you have more certainty and be protected if things go pear-shaped, but clients will instinctively feel safer, more assured and realize that they are in fact, dealing with a true professional!
Leave it to the Pros
If you feel uncertain or think that your specific business can benefit from more focused legal assistance, reach out to a trusted attorney and discuss your requirements with them.
