What is a contract?
A contract is a legally binding agreement between two or more parties that outlines the terms and conditions of the agreement. It is enforceable by law and is often used in business transactions and agreements.
There are some basic elements that must be present in a contract to make it valid. These include an offer, acceptance of the offer, consideration (the exchange of something of value for renumeration), legality (not against the law), and capacity (ability to enter into a contract).
Most contracts are drafted by an attorney or a lawyer, who will consider all the relevant laws that apply to the agreement. The contract should include the following:
Parties to the contract
Purpose of the contract
Products and services to be provided
Renumeration for the products or services
Terms and conditions of the agreement
Contracts can be written, oral, or implied. Written contracts can be formal structured documents drafted by lawyers, or they can be achieved through an email exchange by parties authorised to make commitments on their organisation’s behalf.
Oral contracts are rarely able to be enforced through the legal system due to there being no tangible/clear proof that the contract was agreed upon.
Implied contracts are more difficult to prove because they are based on the actions of one party, rather than being explicitly stated by both parties.
Why should you use contracts?
Having a contract provides many benefits to the parties involved in the agreement. For example, contracts can help clarify expectations, reduce the risk of misunderstandings, and can help protect against fraud and other potential risks.
A valid contract should be written clearly and be understood by all parties, contain all the necessary information, and have signatures from authorised delegates showing their agreement of the content it contains.
The benefits of using contracts are:
Protection against disputes
Clear expectations for each party
Ensures commitment from both sides
Five tips to managing a contract well
The following 5 tips will have you stay across any contracts you need to manage:
1. Know the document well and refer to it often.
The contract provides you with all the information you need to deliver the products or services to the satisfaction of the client. It is a document you need to refer to regularly.
2. Understand the clauses, deliverables governance requirements and timeframes in the contract.
If you are unsure of anything, get your legal support to explain it. Also ask your client to ensure you interpret the contract the same way. Ensuring a common understanding will help you target your efforts appropriately.
3. Be proactive in managing your client.
Don’t wait until things go wrong. Ensure you have regular contact with your client on the contract and its progress. You want to achieve a relationship where you both are invested in achieving success. Don’t leave engagement until something goes wrong, as the client will start to link you to problems.
4. Value the feedback that you’re given.
Feedback is a gift as it takes the mystery out of what the client wants. Feedback is them telling you what they want to see to consider the contract outcomes a success. By actively listening and incorporating feedback into the products and services you provide, you will convince the client of your professionalism and enable you to focus on what you know matters to the client.
5. Use tools like your calendar, or other online apps (such as click up or Asana) to help you keep on top of your responsibilities.
Using tools to allocate time for developing the deliverables for the contract, including time for consultation and clearance, will enable you to map out when every step needs to occur to ensure you always meet contract
Final thoughts
Contracts provide a structured way to obtain agreement between parties on the delivery of a product or service against clear timeframes and process requirements. If you ensure you know the contents of your contract well, plan ahead to ensure all deliverables are completed on time, and proactively manage your client – you will achieve success. Using IT such as your calendar or an online app will help remove the requirement for you to keep everything in your mind. If you would like to learn more about managing contracts and grants.
Author Bio
As a coach, Deborah aims to create an inclusive and respectful space where individuals and organisations can do the work necessary for growth and change. She is also passionate about helping women be valued for themselves while also contributing and being successful.
Apart from her company which she is deeply passionate about, Deborah also loves bushwalking, reading, travelling, and learning new things.
For any coaching or organisational support enquiries Deborah can be contacted via email: info@xseedlead.com.au or via her company website which is www.xseedlead.com.au.
