June 2012


Money will never make you happy, but no money is guaranteed to make you unhappy. The quickest way to lose money in business is to leave business details open ended and not pin them down in a legal document. Spelling out expectations clearly is the ounce of prevention that keeps you from having to come up with the expensive pound of cure.

Think of it, we all hear what we want to hear and everyone would rather hear free than have to pay for it. The old phrase “Well begun is half done” applies. You need to define the elements of a job in a contract that you and your client can review, understand and sign off on. If you don’t put it down in writing, you create a “He said, she said” situation that no judge wants to listen to. Here are the simple elements that any contract must contain to be valid and useful:

Scope of Work– you must describe what the extent of work to be done under the contract will be. This allows you to the differentiate changes and additions to the original contract. Please document those changes or additions in writing with pricing.

Price– What is the total amount of the contract so there is no misunderstanding? A contract isn’t a contract without a contract price.

Schedule– spell out completion dates and then further spell out extended dates on change orders.

Payment schedule– what are your expectations for when you will get paid and do you break it down by phase completed or time elapsed?

Name and address – of the owner as well as the project address.  You have to know who you are dealing with.


Here are some other important items you should consider adding to your contract:

Provision for legal fees – in the event of a dispute that goes to court.

Late fees – in the event of slow payment.

Jurisdiction definition– in the event that a matter goes to court, you want the case to be judged locally and not in your client’s home state which could cause you great inconvenience. Wording to the effect of “Parties agree that jurisdiction over any issues arising from this transaction will be exclusively in the courts of Barnstable County.”

For your sake, and your client’s sake, put things in writing and don’t leave room for misunderstanding or misinterpretation. Handshakes are wonderful….after everyone has signed on the dotted line. Don’t try to show the judge your handshake. He might wave you off!

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