The length (and contents) of your contract gives off so many first impressions to would-be clients. A contract that’s just a couple of emails risks not covering the bare minimum, and a long contract with in-depth legal stipulations may showcase a lack of trust. So what is the ‘Goldilocks measure’ ie what is just right when it comes to contract length?
In a rush to secure a deal, small companies may want their contracts signed asap – before they’ve created a strong foundation of trust and collaboration. Larger companies contract across multiple departments, leading to a more disjointed and less personalised process, which may not build the trust needed to see the project through to success.
Does a short contract make you think something is missing or hidden? Does a long contract make you think that there’s a lack of trust?
First, you should identify the primary purpose behind the contract, and whether it is a truly co-operative document designed to benefit and protect both companies. Things to consider when creating a collaborative contract include:
- Are there any damages for finishing late stated in the contract? If so, are they manageable given the scope and programme?
- Does the client share any responsibility for works being delayed and are these circumstances clearly defined?
- Are there any limits on or exclusions of liability for specific losses? Don’t bet your business on a single project!
- Can the client cancel at any time and without reason, without paying your loss of profit for any outstanding goods, works or services?
- If either of you chooses to end the relationship prematurely, are you both protected?
What should you do?
Make sure your contract builds and enhances trust,whether you have an existing relationship or not, and no matter the size of organisation.
Your contract should clearly demonstrate how you will deliver the scope of works, how that meets the client’s needs, and how both companies will be protected should things not go to plan.