It’s the 200th episode of the Rise Up in Business podcast and I want to celebrate by talking about one of my all-time favourite topics—contracts. 

They’re not just a legal requirement to get out of the way. When done right, they can be a powerful tool for navigating the stress and success of running your own business. 

So what’s the difference between an ineffective contract, and an excellent one? 

Well, the first thing to remember is that your contracts belong to you—yes, even if a lawyer drafts them. They're an extension of your business brand. It's so crucial to ensure they look and sound like your business. 

Imagine presenting a 42-page contract drafted in indecipherable jargon to your clients. Is that a good look? Absolutely not. 

Instead, we want to create contracts that are on-brand, understandable, and worthy of pride. This is your business’s voice, after all.

When I’m drafting or reviewing contracts, I focus on the following four pillars of excellence: 

1. Protection

Contracts must provide security for both parties involved. It’s not just about warding off potential issues for yourself but also about setting clear expectations for your clients. This includes detailing the services offered, setting boundaries, and clearly defining terms to avoid what's known as scope creep.

2. Clarity

The primary purpose of a contract is to lay down clear expectations. Define responsibilities, timelines, and terms of payment explicitly. By doing so, you can avoid surprises and ensure that both parties are aligned in terms of what is expected.. Not only does it help you navigate misunderstandings, it makes sure you preserve the relationship too! 

3. Practicality

Contracts need to work practically in real-world scenarios. Whether dealing with situations where a client defaults on payments or adjusting the scope of work, your contract should provide a clear framework for these eventualities. By doing so, you empower yourself to act confidently without the fear of overstepping legal boundaries.

 4. Flexibility

Allow your contracts room to breathe and grow with your business. They should be adaptable enough to accommodate changes without requiring a total rewrite every time your business takes a new direction.

Once you’ve considered these pillars, you also need to be wary of common 'contract killers' that could sabotage your efforts. Unnecessary formality, missing essential clauses, unenforceable provisions, and inconsistent terminology can all undermine your contract's effectiveness and your professionalism. So get help from a professional who can make sure your contracts are legally compliant and reflect your brand. 

Ultimately, excellent contracts are your most crucial business tool. They underpin growth, protect against risk, ensure you get paid, and help navigate tricky situations. Whether it’s a client service agreement, employment contract, or website terms, the principles remain the same. Make sure they're clear, protective, practical, and flexible.

LINKS:

Episode Website:  https://tmsolicitor.com.au/rise-up-in-business-podcast/what-makes-an-excellent-contract

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