53.Understand+the+importance+of+contracts.

Why are business contracts important?

Understand the importance of contracts. -One of the biggest advantages of using contracts is it allows you and your client to get a clearer idea of what the project entails. It can be used to clearly define payment terms, the project timeline, and the expected project deliverables. -Frankly, requiring a contract is a good way to filter potentially terrible client relationships. If a client is unwilling to sign a contract, this is a sign of trouble ahead. Rather than lamenting the loss of a project, celebrate the fact that you may have dodged a bullet. -However, the headaches, lost time, and frustration that comes with a bad client relationship are not worth it, and often aren’t profitable in the end anyways. It definitely won’t be profitable if they bail on you mid-project or refuse to pay. But if they sign a contract, it indicates that they take the project seriously and probably at least intend to pay you. -Written contracts provide individuals and businesses with a legal document stating the expectations of both parties and how negative situations will be resolved. Contracts also are legally enforceable in a court of law. Contracts often represent a tool that companies use to safeguard their resources. -Business contracts typically include a negotiation process in which various terms to which each party must abide are stipulated. The negotiation process may take days, weeks or months, depending on the contract and the contractual responsibility of each party. Contracts also can include a process for making changes or addendums to the agreement. Businesses frequently use contracts to ensure that a certain level of service is maintained or that competing companies do not have access to specific economic resources -Legal advice should be sought before entering into any binding contract. Small businesses may be susceptible to larger businesses taking advantage of the entrepreneur’s willingness to complete business functions. Contracts often include difficult legal terms that many business owners fail to understand. Attorneys can provide clear information on the benefits of business contracts and whether small businesses should agree to specific contractual terms. 