7 Reasons You Need to Get that Agreement in Writing!
Some businesses, especially smaller ones, have long operated through verbal “handshake” agreements, trusting in the goodwill of the other party to uphold their own part of the bargain. Now more than ever it’s time to rectify that method of doing business.
So much has happened over the last month and I think it’s safe to say that the way we do business has been impacted forever. With the Coronavirus upending a lot of plans, business owners have been fighting something else along with the pandemic- their contracts. One of the ugly realities of a global catastrophe like COVID-19 is the financial and emotional toll it is taking on businesses across industries. What was a sure deal two months ago is now buried in uncertainty and with that uncertainty comes cancelled plans and undelivered promises. Whether it’s between companies or amongst friends, numerous agreements and relationships are in the air leaving behind a lot of possible issues especially when the existence or validity of the contract comes into question.
Some businesses, especially smaller ones, have long operated through verbal “handshake” agreements, trusting in the goodwill of the other party to uphold their own part of the bargain. Now more than ever it’s time to rectify that method of doing business. While it’s great to be able to trust the word of your business counterpart or service provider, handshakes may not hold up when the going gets tough, especially in unexpected climates like the one we find ourselves in now. No matter how you work and what you do, when you need to rely on someone else to provide a good or service, a written contract can help the relationship go from good to great! Below are seven reasons why you should clearly define the particulars of a business agreement and put that s#!t in writing:
It sets clear expectations. No one wants to be confused about their part in a contract and ALSO no one wants to have the wrong expectations. Clearly delineating each person’s obligations under a written agreement will clear up any ambiguity between parties. A good contract DEFINES THE RELATIONSHIP and nature of the agreed upon services or products. Mismatched expectations are bad for business and can ruin any working and/or personal relationship. For instance, the customer may be expecting delivery within 2 days, but it takes you more than 2 weeks to import the goods from overseas. With a clearly written agreement, you can avoid such mismatched expectations and avoid the drama of disgruntled customers because of their perceived delayed delivery. This in turn also sets boundaries, which is very important for all working relationships.
It eliminates “He Said, She Said”. Although many oral contracts are enforceable, they lack evidence and certainty. The parties involved may forget some of the terms agreed upon with the passage of time. Disputes may also arise as to what was actually agreed. Putting the agreement in writing makes everything clear, and offers a point of reference when confusion arises. Most importantly…
It protects your behind legally. This one is a no-brainer. A written agreement can protect you from TROUBLE. Having an agreement in writing minimizes the chances of legal disputes. Since everyone understands what is expected of them, they are less likely to go against the agreed terms. In case of misunderstanding or dissatisfaction with services offered, the terms will act as evidence on whether the promised services were offered. This also means that the customers will avoid escalating the matter or taking you to court as they will have little chance of winning. In addition, some agreements either must be in writing by law or must exist to warn consumers about their legal rights before entering into the agreement. For example, the required Privacy Policy and Terms of Use of a website or physicians who must make certain disclosures in writing before treating a patient.
It also helps you cover ALL the important matters. In the process of entering into a written contract, you will typically consider the business-related issues like price, delivery costs, or payment terms. Rarely will you think about protecting your intellectual property rights, limiting your liability, or the passing of title and risk to the other party. For any non-lawyer, issues like disclaiming liability for delay or failure caused by force majeure are foreign concepts but as we are all currently experiencing (ahem Coronavirus!) -these things could happen. With a written agreement, you can set killer terms of engagement and instructions that will cover all the foreseeable and unforeseeable matters.
It helps you sleep at night. There’s a peace of mind and security that comes with knowing the job is getting done as you envisioned it. On both sides, there may be a nagging voice in your head going “hmmm…did I cover that?” When an agreement is verbal, there is no way to go back and review the conversation and, one may risk looking unprofessional asking too many follow up questions about an agreed upon job. With a written agreement, not only are you sure the job is getting done as you understood or envisioned it, you can also review it and use the processes in place in the agreement for amending it should you need to do so.
It makes you more efficient. A written agreement sets everything clear from the word go. This means that you can work faster and smarter to meet your customer's needs. Instead of tedious emails, calls back-and-forth, and repeated signature to get approval, you already know what is expected and what the customer expects. It also means that you can have all the people, resources, documents, and processes in one place to deliver the work as indicated. If you don’t care about the technical stuff, how about a bit of vanity? Lol. A written agreement will give your company the assumption of professionalism. It shows that the organization cares about keeping a detailed record of its relationship with customers. In other words, the written agreement is a symbol of the organization’s commitment to meeting client’s expectations. Therefore, they will be more willing and comfortable working with the company.
It specifies how the contract or job ends on an amicable note. For some jobs, there is no natural “endpoint” if the relationship continues. A written agreement can allow for the ending of a contract on an amicable and agreed upon date with the ability to renew if both parties are willing.
Yes, many verbal agreements are legally binding but they become hard to uphold when there’s disparity in expectations or interpretations by the other party. If you want to keep things clean and as pleasant as possible, get that s#!t in writing. You have no excuse for risking your brand or finances with oral agreements, especially in this business climate. If you have the opportunity to get it in writing. Do IT!
XO KUNBI
Please note that this blog post is for informational purposes only and is NOT a substitute for legal advice. I am a lawyer but I aint your lawyer. Every situation is different and case and fact specific. So contact an attorney in your jurisdiction for more specific advice.
