Contract on Projects – The Importance
Contracts should be the start of each and every project for your firm. This lays out the groundwork for what will take place during and after the project.
Contracts, first and foremost, are important so that your client and your firm have a mutual understanding of the expectations on the project. This will include the project details, your firm’s scope of work, payments terms, etc.
The contract can be your firm’s contract, an association contract, your client’s contract, a letter agreement or a purchase order. The key is to have some sort of written agreement. Just as long as there is a written agreement between your firm and your client.
Always have your firm’s attorney review contracts that are not standard contract. Also, most insurance companies will review contracts for insurability at no cost to your firm.
The insurance companies can better defend your firm with a written agreement. Verbal agreements become a ‘he said she said’ situation and it makes it very difficult to defend when it isn’t in writing. In most cases the courts will side with your client because there wasn’t anything in writing to detail the project expectations.
The contract also sets the tone of the project with your firm and the client. Your firm knows what is expected and so does the client with a detailed contract. The contract does also give your firm something to lean on if and when there may be issues with the project.
Your firm may also be able to include a limit of liability clause on the contract. This limits your firm’s liability in the event of a claim. It may be limited to your firm’s fees or a specific amount as detailed in the contract.