Common Mistakes: Contracts Part 2
October 14, 2010
This week I’d like to start by pointing out something that is probably obvious, but good to keep in mind as you’re creating your contracts.
Every contract is generally made between two parties, and both parties need to agree on ALL terms.
So, even though we can arm ourselves with a solid, well-crafted contract, out clients needs to always agree to the terms.
In my experience, clients have found sections where they do not agree, and we need to find a compromise.
To address Aisha’s question, I do have a basic contract I use for most of my events, but I constantly add addendums depending on what is needed.
I also want to state that in no way should this blog post be taken as strict, legal advice. I’ve said it before and I’ll say it again that it’s very important to have a lawyer or consult with a lawyer when it comes to all your business and legal concerns.
With that being said, today I’ll focus on the parts of the contract where most clients object and offer suggestions on how I’ve worked around it in the past. (Also addressing Sharon’s question.)
A reasonable deposit the moment they agree to use your services.
- Difficulty: A few clients have a hard time just giving you money before getting anything.
- Solution: I tell them I need this deposit to actually “save the day” for them. If that does not work, we explain that that this deposit covers the time and money invested to design and give the client a presentation and ideas for their event.
50% due the moment you present and both agree on cost.
- Difficulty: A lot of clients may refuse to give you this much so soon, especially if their event is over two months away. They may feel you are holding their money for too long.
- Solution: We generally explain that in order to get the best prices for materials for the wedding, the more time you have, the better the prices.
Balance of payment two weeks before event.
- Difficulty: This is the one term many clients usually have the most issues with.
This is what I have heard:
- What happens if you die?
- What happens if I am not happy with your work?
- What happens if the flowers die?
I could go on and on with the list of concerns. Most of them are extremely valid reasons.
- Solution: This is where you need all of your negotiation skills. And, at times you might need to make some compromises. (However, between you and I, it’s best to collect in time for the check to clear.)
Here are my suggestions:
- Appeal to their good nature. Tell them you run a small business and you need your available cash ready .
- Take a humorous approach. Whenever they buy a new dress, they have to pay for it in full, before wearing it.
- Play hard ball. Tell them the truth (if it’s true for you, of course). Tell them you started this practice, because you have gotten burned in the past.
- Another compromise on this issue is that you get most of the payment upfront, and have them owe you 10% of total balance after the event.
I strongly suggest you never agree to have them pay you the day of the event. I have spent many events hunting down the father of the bride trying to get my check. At times, I felt like I was playing a giant game of hide and seek. You could always tell them you don’t want to discuss or deal with money on their big day
Linda and Sharon, here’s the answer to you question about having a damage clause. You asked: For example, if an expensive vase or item of mine gets broken by a guest, how do I handle that? The answer: My insurance policies. It is very important, even if you run a small business, that you are adequately insured (both liability and workman’s compensation) before installing any event.
One day, I’ll tell you what happened to me 20 years ago when an expensive vase fell on a guest’s head. It was not pretty. So please, I know this additional cost for insurance is a pain, but it’s extremely important.
Sorry this turned out to be such a long post. As Savannah suggested, I am going to continue discussing contracts over the next few Thursdays. I’ll try to get to all of your questions.
Did I mention that it is very important that a client ACTUALLY SIGNS a contract and any subsequent change orders? Just a small, yet important detail…
Please continue sending me your questions about contracts. What do you think is most important for you to add to yours?