CONTRACT OR BUSINESS TERMS AND CONDITIONS?
One question we are often asked “what’s the difference between having a written contract with a client and business terms and conditions? Let’s explore this.
GET IT IN WRITING
When you’re working with a client, it’s important that you both know
- where you stand
- your obligations and responsibilities – who is supposed to be doing what
It’s important to get that in writing, so that you’ve got something to rely on. You can do this in one of two ways:
(1) Formal written contract
You can have a formal written contract that you can have signed and negotiate with a client that’s clear. It means having a different contract for every client. You’d need to start making changes to the clauses of that agreement with each client. Yes, it would work perfectly well, but it is quite a complicated way of doing it.
OR
(2) Set out your Business Terms and Conditions – how YOU do business
A much better way is to decide,
- what are the foundations of you doing business?
- What’s important?
- What do you need to tell clients?
Set this out in one document which remains the same for every client – your Business Terms and Conditions or Business Terms.
BUSINESS TERMS AND CONDITIONS
Your Business Terms are about deciding how you are going to do business. So, what do you need to think about?
- There might be certain things you need to tell clients, because the law says you have to, particularly if you’re dealing with consumers.
- Then, there are things that clients need to know. What about payments? When is the work expected? What’s going to happen if they’re late with the payments?
- What about the things that you expect from a client? For example, you may not be able to do work for client, if they don’t give you what you need to work on. Let’s say for example, the client is asking you to work on a spreadsheet or deliver a session to some of their employees. Without the spreadsheet or without the information about the employees, it’s not going work is it? The client needs to know that. They need to know that it’s not your fault if you can’t do something so they can’t then blame you.
Think about what’s important to your business and lay out those foundations in your Business Terms.
THE WORK DESCRIPTION DOCUMENT
Alongside your Business Terms and Condition, you need a document which confirms what work you are doing for that particular client. A Work Description Document.
This can be a straightforward order confirmation, a proposal, or a schedule of work, it doesn’t matter what you call it, but something that is personal to that client. Something where you will say, Mr. X,
- I’m going to do this
- I’m going to do this work within this deadline
- It’s going to cost this and
- You need to give me whatever we have agreed is needed for me to start on the work.
You might be able to refer to a package that you sell from your website. You can usually design a template for it. One way of doing things so you can show it to many – cuts down work, expense and options.
As part of the document that describes the work, you would mention this is all reliant on my standard terms and conditions. Together they form a legal agreement.
So, think of it, if you were printing it on paper, you’d have
- The Work Description, something like order form on the first page.
- Then you’d have the Business Terms printed on the back of it.
This way, you’ve got a contract with your client, a legal agreement. You’re both clear what you’ve agreed on, and you’ve committed to that in writing.
It means that you don’t need a complicated, different, and formal legal contract with every client, because that is your core contract.
Once you’ve decided on your Business Terms that’s it. It’s much easier for you. If you do need to make a change for a particular client, you can do this in your work description document. So, say, for example, your Business Terms require payment within 7 days. Then a good client with a big order wants28 days to pay. It simple to include on your Work Description Document. You just need to say, “we’ve agreed a change to my terms in that you can pay me within 28 days of my invoice”. It’s as simple as that!
Using a Work Description Document and Business Terms is an easy way to formalise your relationship with your client.
Make it easy
So, it is important that you have a contract with your client and that it is in writing but make it as straightforward as you can. I would suggest that having
- a standard business terms that you can rely on all the time AND
- an order confirmation or a schedule, which is personal to that client and which gives the information which is relevant to them.
This is a great way forward for your business and makes it very straightforward for both you and the clients.