Sometimes business owners can cobble together parts of their business. Yes, you can paint your walls, build the shelves and build a website. But there are some things you really need to outsource. Like your contracts.
Lawyers are a great asset, but not always a requirement. Contracts can be enforceable (yup, even some written on napkins) without being written by a lawyer. But you want more than that. You want to make sure that a contract isn’t unfavorable to you – as in will it potentially work against you? And if you take a free contract from a website and change some words, you’re risking this. You’re risking a lot for your businesses already, and you don’t need to add to it.
Here are some of the dangers. Don’t worry; we’ll also offer some suggestions.
It may not be valid.
Yikes. Simply put, a contract is an agreement among at least two parties. They must contain an offer, acceptance, and consideration to be valid. For example, you are offering your clients a program, personal training session, or membership for a certain amount and they agree to pay you for that. But if you’re missing the consideration, what exactly is being agreed to, your contract may not be valid.
The person you’re contracting with may not be who you think.
Contracts need to be clear about who the involved parties are. Person or company? Who’s required to perform their obligations? There’s a difference between you as the business owner and your company.
Words are confusing.
If you wanted to be a legal expert, you’d have done that. We know that. Words can mean different things in all fields, and contracts are no different. The courts decide what words mean, so you want someone in your corner who knows the legal meanings.
The courts need to understand, too.
A contract exists because there needs to be a clear understanding of who is agreeing to what. If there are unclear sections of the contract (we call these clauses), the court will clear things up. And unfortunately, the court will interpret against the person who drafted the contract. That’s because it’s your job as the draftee to make it clear. But, the court doesn’t care that you’re a business owner.
Contracts aren’t good across all locations.
This one is key if you own more than one gym or have more than one location where you perform services. Particularly if your locations are in different counties or even states if you’re close to the border. “Boilerplate” language and phrases can backfire.
You agree to something other than what you thought.
Lawyers are not the most positive people, which you may know if you’ve coached any of them. But, they are good at finding problems before they affect you. Self-drafted contracts (or the ones you find online) frequently make it seem like you agree to one thing when you think you agree to something else.
You find you may need multiple contracts.
This is one of the best reasons to make sure your lawyer is drafting your contracts. Even among your clients, you’ll want different contracts for membership, personal training and other services you offer. As an employer, you’ll need employment agreements as well.
You may just need a lawyer.
Try as you might, even with a well-written, enforceable contract, you may need a lawyer. Even if the contract can’t be enforced completely, both parties usually want the agreed-upon terms to stand. Also, if one party doesn’t stick to their side of the contract, you may need some help enforcing the agreement.
Bottom line upfront here: If you’re going to repeatedly use a contract, make sure it’s sound to start. Also, it takes more time and money to fix something then it does to do it right the first time – something most business owners have already figured out. It’s not worth it to risk all the effort you’ve put into building and growing your business on a DIY or self-drafted contract.