Introduction: What Are Contracts & Why Do They Matter?
It used to be risky enough just to run a business. But doing business in the digital age, the stakes higher than ever.
As the owner of a small tech business, you know the score: you could be sued over failing to prevent a hack or data breach. Your clients may not understand the wizardry behind your work, which may lead them to blame you for a whole host of losses that you had nothing to do with. Even if you're not at fault, clearing your name in court can cost thousands (not to mention ding your reputation).
That's where contracts can help. And a contract doesn't have to be riddled with legal language to be effective. In fact, to be legally valid, a contract simply has to meet these two conditions:
- All parties must be in agreement. An offer is made by one person and accepted by another.
- Something of value must be exchanged. For example, your tech business trades services or products for your client's money.
When used properly, contracts…
- Outline the terms of a professional agreement.
- Clarify what all parties are expected to do.
- Provide the legal footing you need in the event of a lawsuit.
Pay special attention to that last point, because more than 15 million lawsuits are filed every year in the United States, according to the National Federation of Independent Business. The icing on the cake? Many are meritless. That means the chances of your business being sued are high, and you need to be prepared to protect yourself.
So let's get started. This guide outlines the contracts IT professionals most often need and explains which types of contracts you need for your work.
Next: Chapter 1: Contracts that Define Client Relationships