No matter how much you love what you do for a living, one thing is certain. You have a reasonable expectation when it comes to your business getting paid. Meanwhile, there’s always a chance that you will be saddled with deadbeat clients. Without a doubt, too many of them could have you operating at a loss. That said, the right contract could prove to be a real asset.
For a moment, take a step back and think of your initial contract. Was it a handshake agreement? In other words, did you and your customer make a verbal agreement that you would perform services or provide goods? Determining whether an oral contract is valid may depend on a few factors.
Take for example the sale of goods. According to 13 Pa.C.S.A. § 2201, there are situations where you should have a written contract if you ultimately need to pursue payment through the courts. With limited exceptions, you won’t be able to enforce a contract for providing goods over $500 – unless both parties have signed an agreement.
The bottom line is there are steps that business owners can take to protect their interests when it comes to getting paid. An attorney with experience in commercial and corporate law can provide you with advice to start things right.
Contracts: The First Step
The first step to making sure your business gets paid actually begins with a well-constructed contract. One warning. Attempts to save money by combing the internet for form agreements – can actually cost you more in terms of loss. One of the many problems with standardized contracts is that they are not particular to your business model. Additionally, it’s rare to find a form that is state-specific.
A contract for services or goods acts as the master plan for the business deal. At the very least, it should contain the following terms and conditions:
- Duties: What is the purpose of the contract? Does your company represent one of the trades? In other words, are you a plumber, electrician or even a general contractor? Your contract should provide the details of the intended work.
- Dates: Your contract should also list a variety of dates. On the business end, it may contain information as to how the work will progress. However, your agreement should also contain information about payment dates.
- Payment: In order to make any type of collection efforts, your contract must also provide information regarding disbursements for your services or provision of goods. If you agree to accept installment payments, the dates should be clearly listed.
- Means of Enforceability: How will your contract be enforced? Does your attorney suggest that arbitration makes the most sense? If you have to pay a lawyer, will you be reimbursed for your attorney’s fees?
All things considered, something else is important when it comes to contracts between parties. If you do have a written contract, you cannot change it with a verbal agreement. Your attorney will need to draft an amendment to the original contract.
Contact Fellerman & Ciarimboli to learn more about developing business contracts that will work for your company. We are here to help make sure you are in the best position to enforce all aspects of your agreement with clients and customers
With more than 40 years of combined experience, the personal injury attorneys at Fellerman & Ciarimboli strive to provide the best service to clients in Philadelphia, Northeast Pennsylvania, and throughout the Keystone State.