The signing of the contract is the defining moment between the client and the company. It is a result of a long and winding road made out of various offers, presentations, interviews, and considerations... But before signing there is one more step — clarification of the terms and conditions.
It can be a bit overwhelming when you are doing it for the first time because there are many details involved. However, we have prepared a little guide for you to help you be prepared and cover all bases.
Why do Terms and Conditions matter so much?
The reason is relatively simple. As you know — the devil is in the details and it tends to mess things up badly. The thing is — the contract is the definitive document of the business relationship. You can’t just accept terms and conditions in the generic form - you need to go deep into the thick of it. The contract is the thing that determines how’s, what’s and why’s of the whole ordeal — the code of conduct, responsibilities of all involved parties, a model of cooperation, payment method, and more.
It is a big deal and it needs to be balanced out in a way so that none of the involved parties will have enough power to abuse their influence over another. But it is easier said than done. Since contracts are negotiated between humans — oversights can occur.
What can go wrong with Contract terms?
You may ask “What possibly can go wrong?” The answer is — whole lotta things can go not as planned. You never know what is lurking around the corner and because of that, you need to be cautious and talk about every single detail.
Terms and conditions may apply to a variety of factors. Such things as monthly pricing and scope of work usually take front and center of the negotiations, while such sensitive subjects as contingencies for added work or emergency situations might be underdeveloped or even omitted in the overall fuss.
Let’s take a couple of examples.
You need to know what will happen if you deliver the product to the client, and he doesn’t like it? Or you need to determine whether further revisions after deployment will be for free or for an additional price. Also, what if your client will decide to reduce the scope of work at some stage — how it will affect the minimum monthly fee? The list goes on.
In other words — everything needs to be negotiated through in advance.
What will happen if not everything was talked through and something was left out for some reason? Let’s talk metaphorically. “Mess” is a four-letter word that describes a state of confusion, disorder, or disarray. It is definitely not very nice and it likes to bring her friends, the other four-letter words that are even less nice. If being more exact — an underdeveloped contract may cause some not so pleasant surprises to all involved parties.
In order to make everyone’s life easier and relieve anyone from needless stress — we have prepared a little checklist of terms and conditions that need to be worked out in advance. It can be used as a terms and conditions template for refinement of the contract.
Terms to Specify in Advance
The terms you need to specify will depend on what services you’re offering, the size of your client, the approximate budget of the project and some other factors. This is by no means a complete list, but these are some things to look out for as you draw up your contract.
Pricing & Payment
- How much will the services cost?
- How often will payments be made?
- Will payments be made before the services are performed or after?
- What happens if a payment is coming late?
- How to handle the client’s request for additional services?
- What if the client wants to reduce services or rearrange its order?
- Is there a minimum value of services per pay period?
- Is payment results-based or is it a fixed cost?
- How long will the contract period last?
- Can it be canceled at any time?
- What are the circumstances under which the contract can be canceled?
- How can the client cancel services?
- How much in the advance notice should be given in order to start the cancellation of the contract?
- What if the client wants to put the contract on ‘hold’ for some reason?
- Does the client get the right to request revisions upon delivery? If so, are they included in the original price?
- What if the client doesn’t like the delivered results even though it was already been agreed upon and produced? Who pays the extra charge?
- Is there a limit to how many revisions the client of the project can request?
- If the company misses a deadline for some reason, what will happen?
- Does the client get some kind of compensation in return?
Scope of Work
- What kind of work will you provide? What does this work include?
- In which manner the company is going to present the results of the work?
- Can the client increase/reduce the scope of work as needed? Should it be negotiated beforehand?
The purpose of this list is to help to check whether every little peculiarity is included in the contract. You can use it as a shorthand while checking whether everything is covered or if there is something that needs to address.
As you know - preparation is half the battle won.
Want to receive reading suggestions once a month?
Subscribe to our newsletters