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How contracts can help safeguard your business

Many business owners can attest to the value of a solid contract — a lesson frequently learned the hard way. A contract can help protect your interests in a variety of business relationships. Without one, you leave yourself with little recourse against any number of challenges, from nonpaying clients to disagreements with dissatisfied customers.

Contract composition
Not only does a contract provide proof of your agreement in a court of law, it can also lend legitimacy to your business. To create a contract template for your business, consider the following tips. A small business attorney can help make sure your final product will hold
up in court.

An attorney’s guidance can be invaluable in creating a contract template, and the business bankers at American River Bank may be able to connect you with a local, reputable small business attorney. Contact us more more information.

Start with the essentials. A legally binding contract must include two things: 
  • An agreement between two parties that an offer made by one party has been accepted by another.
  • An exchange of something of value — such as goods, cash or services — for something else of value.
Add some details. Include contact information for both parties; a detailed project description that spells out what the client will get and what is out of scope; important dates, such as the term of the agreement and any key deadlines throughout the project; rates and fees; a description of your invoicing procedure; a statement of ownership and rights; and a cancellation clause and revision policy.

Finish it with signatures. Once you and the other party are satisfied with the terms of the agreement, you must both sign the document to make it legally valid.

Finally, use short, clear sentences and break up the document into well labeled sections to help all parties understand the document.