Contracts can be created in 2 ways: verbal or written. Both of them are valid in a court of law. However it is ALWAYS best to have a written agreement, especially when money is involved. When I went into business with a friend some years ago, for the sake of our friendship we put all of the terms of our partnership on paper. There were so many things that needed to be accounted for that a solid contract on paper just made good sense. Like they say...the Devil’s in the details. The following are 3 reasons why written contracts blow verbal contracts out of the water.
Memories fail
Unless you have hyperthymesia or a photographic memory, you are not going to remember every conversation you have with people that you do business with and every piece of paper you scribbled something on. Having everything in one cohesive document that all parties have access to gives you something to reference if one of the terms of your agreement slips your mind.
2. People lie
Let’s face it; everyone you go into business with will not have the best intentions. Having a written agreement will come in the clutch if you have to go to court to sue for damages or if you are sued for something that is not your fault. It’s easier to show the court what you guys agreed to on paper than to try to convince the judge that you are telling the truth if all you have is a verbal contract.
3. Things go wrong
You have to have a lot of confidence to take the route of entrepreneurship. But don’t be so confident that you think nothing will go wrong. It is really important to have a plan in place if something does not go according to plan. A good contract will have provisions for how to proceed if something goes wrong. While you can’t plan for EVERY possible outcome, you can take care of a good amount of them with a well written contract.
Now that you know why a written contract is better go pick up my FREE Contracts ebook! My ebook explains all of the parts of a contract, who can make a contract, and what you can make a contract for! Go get it now and protect your business and your relationships!
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