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Contracts 101 for Digital Entrepreneurs

The Who, What, + How For Using Contracts In Your Business

· Boss Tips,Legal,Contracts

The following article was written by an attorney but is not legal advice. Please note that all of our blogs are for educational purposes only.

Do You Read The Fine Print?

Better question... do you read your contracts at all? It's ok, I'm not judging. Let's face it, we've all clicked "accept" when prompted to accept terms and conditions online. Does anyone even really know why website's have Terms and Conditions?... I'll get back to this in a bit.

Maybe you trusted the leasing agent's word when reading over your apartment's new lease agreement. Those things are sometimes 20+ pages, and it's not like you're going to change the rental policies, right? So you nod and sign and move on with the daunting process.

Despite the inconvenience or lack of understanding, you really should take your contracts pretty seriously. Signing away on an obligation you did not bargain for or having an employee fall short of expectations can all be prevented during the contractual negotiation phase of your next business relationship.

What Is A Contract?

Before I dive into how you should be using contracts to protect your business, assets, and transactions, let's make sure you have a solid understanding of what a contractual agreement actually entails. If you are a lawyer or in law school, then you know exactly how I am going to explain this: Offer + Acceptance + Consideration = Contract.

The Offer

A contract is essentially an agreement. In order for this agreement to really count, it needs to be enforceable - meaning it would hold up in a court of law. The first requirement is having a clear offer. Someone is requesting something, selling something, or offering to provide something. The contract should clearly articulate what this offer is and all the relevant details surrounding it. For a coach or influencer - the offer might be the coaching services or content creation. Essentially, the offer is he first step and the main reason for creating the contractual agreement in the first place.

The Acceptance

Step two is what some like to call "the meeting of the minds", and by some, I mean every single contracts law book ever. This phase is all about being on the same page. They want what you're selling. The key is making sure that the other party not only agrees, but agrees to the same exact terms you intended. Acceptance can only really be valid when you are both clearly agreeing to the same thing (this is why asking for clarification before signing is so important).

NOTE: Your client or customer can accept by paying for your product, showing up for their session, or simply signing the agreement.

Consideration (What's The Exchange?)

The easiest way to remember this one is to make sure your transactions are not based on gifts or favors. Consideration means someone is paying you for your business services or providing some sort of benefit in return (or trade).

Now that we know what we are dealing with, why should you care?

Besides presenting a professional brand and protecting your business from a legal perspective, using contracts correctly can save you time, money, and a whole lot of stress! Unfortunately for many entrepreneurs, they come to me seeking legal services after realizing that they did not use a formal contract, used one that was unenforceable, or neglected to read what they signed. 😬

Let's Limit The Drama

I want to help you eliminate some of these time and energy draining legal battles and get you going in the right direction. Here are three frequently asked questions to get started:

1. Do I Need A Contract?

If you run a business online, you need a contract. It doesn't matter if you know her from high school, or if the transaction seems small. Every deal needs an agreement, confirmation letter, traditional contract or receipt. For the digital entrepreneur selling products on your website - that's where Terms and Conditions come in. When you include terms and conditions on your website you are creating a contract with the website user. The transaction does not have to include an online purchase. The terms actually cover general use of the website as well. Once payment is accepted online, that's when things like a Privacy Policy can be important to reassure a website user that their information is safe and will not be misused.

If you're not sure what the heck to use or how, you can always schedule a complimentary call to learn more!

2. What Type Of Contracts?

You can use a contract to govern any legal transaction or business agreement. For most digitally based entrepreneurs, it's great to start with some sort of service agreement. This agreement should cover the following:

  • What you plan on offering your client;
  • Your expectations for the working relationship;
  • Payment terms;
  • Emergency provisions (this may include your COVID-19 policies);
  • Obligations for both parties; and
  • Standard provisions 

This list is not exhaustive but is a great start. How you title this agreement and the specific details will depend on your actual service/product and industry. It's important to speak to an attorney if you are starting from scratch or need someone to review what you currently have in place.

In addition to some sort of contract that covers the sale or service provided, you might want to consider having clear:

DISCLAIMERS

COLLABORATION AGREEMENT

INDEPENDENT CONTRACTOR AGREEMENT

3. How Do I Get A Contract Or A Lawyer?

Now you might be wondering what you should do next to get your legal department in check. If you are a service-based entrepreneur, you are in luck! You don't have to stress over the fine print or worry that the contract you pulled from a google search is valid any more 😅

The newest Boho Contract Bundles have been designed to help YOU - the digital boss! If you are an online coach, creator/influencer, or consultant, then we have exactly what you need to legally build and protect your brand. You can shoot me an email below with "Contract Bundle" in the subject line to access more information!

You can also have an attorney draft a custom contract or have a legal professional review your current agreements. Just make sure to always read (and use) your business contracts ... especially the fine print.

For more information on important legal topics for business owners and how you can work with my firm, head over to omilegal.com.

Written By: Olamide Michelle

Thanks for reading!

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