Most businesses, especially IT service or other related service businesses use contracts to define the relationships they have with their clients. It can be intimidating for any small business owner to find they are responsible for creating a contract for their business, but it doesn't have to be. The best contracts for an IT service business or any other service business is one that doesn't contain a lot of legalise in it and is easy for both parties to understand. You don't have to fill your contract with mind-numbing legal language for it to be binding; you simply have to have two basic elements in it:
1. All parties must be in agreement. Generally this means that one party has made an offer and the other has accepted the offer.
2. Something has been exchanged that is of value. This can be cash, services or goods and it can include an offer to exchange these items in the future as well. Both what has been offered initially and what is offered in exchange must be noted by both parties to have value.
Get It In Writing
While most business people will stand by this rule, your agreement doesn't have to be written to be legal. But you will need to check on what the standing rule is for your region before making that decision. This is why whenever you are dealing with business matters, getting the agreement in writing is always the smartest move. But know that even if you have a handshake deal, most courts of law will still see that as legally binding if you can prove there was an expectation that the deal was sealed by both parties. But the bottom line remains that when in doubt get it in writing.
The Basic Steps
So how do you even start putting a contract together? While it may sound intimidating, it is really very easy to do if you follow these five basic steps:
1. Clarifying the Offer – Be sure that you are clear what the initial offer is. Someone stating they would like to do business with you is nice, but someone saying they have a budget of $100 a month for your services and they are willing to pay it is a more clearly defined offer. Don't be shy to ask them to clarify what they want to do first.
2. Accepting the Offer – Once you know for sure an offer has been made, be clear about your own acceptance of it. If that prospective client is clear they want to hire you to take care of their IT needs for $100 a month, contact them accepting the offer. This leads us to the next step.
3. Defining the Details – Make sure both parties know and understand what this agreement covers. This is the area many smaller businesses fail to do. Talk over the details first, and then follow up with a letter of proposal. In the letter accepting their offer, clearly outline what the project will include and most of all what it will not include. Say it simply in clear language.
4. Documenting the Agreement – The best way to ensure you both are happy is to define the agreement clearly in a written document. Give the contract a name, clearly state the names of each party involved and clearly state what the responsibilities of each party will be. This should be based upon your letter of agreement or phone conversations. Include all terms and conditions and don't forget to date it.
5. Signing and Notarizing the Deal – Once all the details have been agreed upon, print up two copies of the document and have both of you sign it, preferably in front of a notary to legally witness the document. Banks are often a good place to find a local notary for this.
Keeping Your Contract Simple
The bottom line is that while you should have what you agree to do in writing, it doesn't have to be complicated. Most agreements can be written up with a simple conversation to clarify the details, a phone call to confirm everything and then write it up and sign it. Whether creating an agreement to provide one time service or an on-going maintenance contract, keeping the language simple and outlining everything it includes will make the contract easy for everyone to understand and follow.
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