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AUSTRALIAN WELDING | SEPTEMBER 2016
Business Essentials: Tips for
Air-Tight Contracts
A clear, comprehensive, and air-tight contract is the lynch-pin of a professional business relationship. Contracts are legally enforceable, and come in two forms: written and verbal. Verbal contracts are notoriously unreliable, but written contracts will place you on much surer ground. Once you’ve got something in writing, signed by both parties, there can be no dispute over the terms explicitly stated in that specific agreement.
But you haven’t necessarily got an air-tight contract yet. Indeed, even written contracts can have clumsy and misleading language, and must be carefully written so as to protect your interests. Contract Essentials: Clarity, Understanding, and Detail For contracts to do their job properly, they must provide effective communication. We’ll get to the particulars of what air-tight contracts should cover later, but if a contract fails at communicating effectively, you’ll likely to find yourself on a slippery slope. The first thing you’ve got to realise is that language must be clear. There is no place for pretty synonyms. Use terms that clearly reference what you’re trying to say.
Write With Clarity The clarity and consistency of your language will aid understanding, but don’t leave anything to chance. By writing in plain English and defining terms where necessary, you’ll be one step closer to an agreement that leaves both parties on solid ground. Effective communication, then, demands understandable terms that provide sufficient detail. But how much detail is enough detail? After all, there’s no need to re-vamp War and Peace to pen a legally enforceable welding contract. Fortunately, detailed contracts don’t have to be novels—far from it. What we’re getting at here is precision. Writing with sufficient detail will eliminate vagueness from your contract, and it’s vagueness that could land you in trouble.
A clear, comprehensive, air-tight contract is the lynchpin of a professional business relationship.
Don’t Be Vague Here’s an example to make things clear. If one party is agreeing to complete an element of work by a certain date, make sure to reference a specific date. A vague contract might say something like: ‘…to be completed by the middle of April.’ Well, when is that exactly? Don’t leave room for confusion. If you mean ‘…to be completed by April 15th’, then say so explicitly. Contracts don’t have to be set in stone, of course. And if both parties agree to alter a contract once signed, then make sure to explicitly state the changes to the contract by writing—and signing—an amendment. Contract Essentials: Payment and Termination It’s no surprise that many contract