Common Mistakes: Not Having a Lawyer


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I come from a culture that honors your word as your bond. For me, a contract was very simple: you make a promise and you keep it.

For the first few years of being in business, I was very loose about contracts. My strategy was this: whatever I promised my clients, I always made sure to give them that and a bit more. Actually, this worked for many years because my clients mostly walked away feeling like they received excellent service and also got more than they bargained for–until I got slammed.

I’ll never forget this. 18 years ago, a client owed me $25,000 and simply refused to pay it. My contracts were so loose that there was nothing I could do legally. This was a very expensive life lesson (one that I’ll never make again). If you are starting your business or if you have a growing business, get a lawyer. Yes, I understand choosing the right lawyer who understands your business is not an easy task, not to mention costly, but this is too important to protect yourself and your business not to do it.

Here are a few suggestions to keep in mind when setting up your contracts (of course these suggestions will change depending on your services):

  • Always get a retainer for your services. You never actually have a job until the client commits to giving you a deposit to confirm your services. It is up to you how much time and energy you’ll invest before this commitment.
  • Your contract should be extremely clear in what the clients should expect of your services and when. Always keep in mind that no client (including ourselves) likes a contract that is mostly in your favor.
  • Payment schedules should be very clear. My suggestion is to break it up into three different payment deadlines: First Payment: To retain your services, once you both agree on all the terms.Second Payment: If you are a designer, you should have a full presentation where the client understands and approve all the designs they want to choose. (Client might even sign papers stating they understand and love your design). At that moment, you should get half of the cost of the job.

    Third Payment: This should be non-negotiable. Balance of payment should be made one or two weeks before the event. However, if for some reason you are not able to deliver what you promise, you should always be willing and open to compensate your client.

  • You might also want to put a clause in your contract stating that the client is responsible for any unforeseen additional expenses.

As you are constructing your contracts, always remember that the only way to have a happy client is for them to understand the value of what they are getting. And no matter what, your goal is to give it to them.

Tell me, have you ever had any trouble receiving payment from a client? Were you able to get the payment?