Getting paid is critical to the continued livelihood of each and every business. Yet, too often, businesses do not get paid for services they have rendered or for products they have sold. While there are rarely any guarantees of getting paid, absent collecting an advance retainer or deposit, having a contract, an executed proposal, or a letter agreement will greatly enhance the chances of collecting your hard-earned dollars.
While there are typically no requirements that contracts be in writing, there are numerous benefits, both legal and non legal, to do it nonetheless. First, the mere use of a written contract is a signal in the business world that you are an established and professional entity and that you will tolerate nothing less than what is spelled out in your written agreement. Second, placing the terms of the transaction in writing greatly increases the likelihood that each party will fulfill its obligations in a timely manner and reduce the likelihood of a misunderstanding. Third, a written contract reduces the likelihood of a collection problem because the payment terms, as well as the ramifications of non payment, are provided for in the agreement. Finally, in the event you are required to bring legal action to enforce the provisions of the contract, you are more likely to prevail because it is much harder to dispute the terms of a written agreement and much easier to prove the intent of the parties.
The use of a written agreement in one form or another will not only increase your chances of getting paid, but it is generally a legally binding agreement upon which you can bring a legal action, if necessary. Help yourself get paid — put your arrangements with your clients and customer in writing!
For more information, contact the Davis, Agnor, Rapaport & Skalny attorney with whom you typically work, or one in our Business Planning & Transactions Practice Group.
