The Worst Assumption I Ever Made: Contracts Aren’t Necessary
By: A Staff Writer
Updated on: Oct 24, 2024
I assumed that formal contracts and agreements weren’t needed when dealing with clients and suppliers.
Why I was Mistaken:
- Legal Protection: Contracts provide legal protection by clearly outlining the terms and conditions of an agreement. Without them, you risk misunderstandings and disputes.
- Clarifies Expectations: Contracts ensure that all parties are on the same page regarding deliverables, timelines, payment terms, and responsibilities.
- Professionalism: Using contracts demonstrates professionalism and establishes a formal framework for business relationships.
What I Did:
- Dispute Over Deliverables: A verbal agreement with a supplier led to a dispute over the quality and quantity of delivered goods. Without a formal contract, resolving the issue was challenging and costly.
- Payment Issues: I faced payment delays from a client because the payment terms weren’t clearly defined in a contract, causing cash flow problems.
Do This Instead:
- Use Formal Contracts: Always use formal contracts when entering agreements with clients, suppliers, and partners. Ensure that all critical terms are clearly stated.
- Seek Legal Advice: Consult with a legal professional to draft and review contracts. This ensures that your agreements are comprehensive and enforceable.
- Keep Records: Maintain thorough records of all contracts and agreements. This helps in tracking obligations and provides a reference in case of disputes.
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