The Importance of Contracts

Contracts can create more work, but they are important tools for freelancers and small business owners for a number of reasons:

  • Deals made without a valid contract may not be enforceable.
  • Without a valid contract, the parties may be confused about the cost of the products/services, how to perform, the expected timeline, and many other details of the deal. Contracts provide certainty for both parties.
  • Doing business deals without valid contracts can more easily lead to legal liability and lawsuits.
  • Contracts can serve as valuable evidence for business owners to show investors, auditors, and regulators that the business is operating properly.
  • Contracts help protect against nonpayment from clients and customers.
  • Contracts keep the business organized and running smoothly. They create a record for business owners to track sales, payments, and when work with clients starts and ends.