In this episode I am taking it back to “Building a Wall of Protection” for your business. I am talking about contracts and how to build layers of protection for you and your business. It is always important to have contracts and to build contracts that cover all of the details of what you are providing in order to be as protected as possible.
In this episode we will cover:
- General contracts that every business needs.
- When do you need a contract?
- The most important clause in a contract.
- Signing contracts.
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The Legalpreneur Podcast is advertising/marketing material. It is not legal advice. Please consult with your attorney on these topics. Copyright Legalpreneur Inc 2022
Episode 242: Everything You Need to Know About Contracts Transcript
Andrea: [00:00:03] Welcome to the Legalpreneur podcast. I’m your host, Andrea Sager, founder and CEO of Legalpreneur Inc. As a serial entrepreneur and someone that works exclusively with small business owners legally protecting their business, I’m dedicated to covering common legal issues faced by business owners, providing you with the business knowledge you need to catapult your business’s growth and showing you just how some of the world’s most elite entrepreneurs have handled these legal and business issues themselves. In true attorney fashion, the information in this episode is not legal advice. This is for informational purposes only, and you should always consult with your attorney before implementing any of the information in the show.
Andrea: [00:00:47] Hello there. I don’t know if you’ve noticed, but there have not been very many episodes lately. I came down with some awful, awful bug and I was literally laid up for a week. I missed a trip that I was supposed to go on, and it wasn’t COVID, it wasn’t the flu, it wasn’t strep. Like literally tested me for everything. And the doctor was like, Yeah, there’s just something going around that is awful and I kid you not. I was the sickest I’ve ever been in my entire life. It was the craziest thing. And I went I worked, like last Monday and went home and I oh, I left and I was going to go get my nails done and then go home and I go get my nails done because I was so exhausted and I. Went home, went to sleep, did not get out of bed until Thursday morning. So I. Well, okay, that’s a lie. Wednesday morning I went to doctor, but besides that, I slept for like three whole days. It was crazy. But I am healed finally feeling a lot better. And so we’re taking it back to building the wall of protection. Now we are on contracts, and I want to make sure that you’re understanding what contracts you need in business, what goes in them, and just some other tidbits about contracts. But before we get into it, we are coming up on our next free legal training.
Andrea: [00:05:24] But you don’t have to have a written agreement that people have to sign. But what I do suggest is having terms that people understand. So if if you have a scheduling link you’ve used Callen, Lee, or Acuity, there’s a place for you to put terms or details. And like, when a guest schedules to be on the Legalpreneur podcast. They I use only. And so in the details I put all the terms that I want to make sure they’re aware of, which includes the main one is just knowing, hey, we have the final say in how the content is edited. We can repurpose the content for any purpose that we want and we own the content. That’s the main things that I want. People understand when they’re being interviewed on the podcast. So that’s really the contracts that you want to make sure you’re using. Now, what’s in those contracts? I did an episode on this a long time ago about the most important clause in the contract, and most people think it’s money getting paid and when, which that’s very important but. In my opinion, the most important clause is the intellectual property clause. So if there is intellectual property being created as a result of this relationship, who actually owns the content? Now, I don’t want to get into details about all that because I’ve done plenty of episodes on it.
Andrea: [00:06:51] But intellectual property just know that clause is probably the most important clause in your contract and you always want to make sure that’s there. Other important provisions, actual services. What is actually being provided now if you’re saying, Oh, I’m going to create your service provider, let’s say you’re creating. Your ad agency and you’re creating Facebook ads for somebody. So you don’t want to just put Facebook ads. You need to get specific how many ads, how how much budget can be spent for this relationship. Like all the little details, what if the ad account gets suspended? What if, like, there’s a lot of contingencies that you need to make sure are covered, especially knowing exactly what’s covered? If you’re if they’re providing if you’re providing Facebook ads, are you also are you just me media buying? Like are you just the ones setting up the ads or are you creating the content, the copy, the graphics videos? Like what exactly is included in your service? I get so many people that come to me with contracts and they’re like, Oh, hey, how does this look? I’m like, okay, well, I get it. You’re providing a overall service, but we need specifics in this contract as far as exactly what you’re. Providing. I interviewed Jasmine Jonty. She is a course creation agency, so that’s coming to mind. How many modules in the course, How many videos are you helping to create? Are you creating the copy or is there like a certain number of videos modules? Are you doing the copy? Are you doing this or.
Andrea: [00:08:32] So it’s just making sure that you’re breaking down exactly what’s included if you’re going to if you’re a course creator and you are putting together the terms for your course and you want to put the name of your course, y Z, that’s what’s being provided. But what exactly is included in the course? Are there three modules with five videos each? And you don’t necessarily have to say how many videos each, but I would say like how many modules, how many bonuses you have downloads that come with it. You have group coaching calls, if that’s included or not. Is there Facebook group? Is there any one like what exactly is included in the purchase? So a lot of times what we when people ask us to draft a custom contract for them, what I would do is just go to their sales page. I would ask for a sales page and go go off of that. And because the sales page should be specific as in what’s included. And so with the sales page, that’s basically what we base the contract off of. There’s a lot of important provisions in a contract, so I don’t want to go through all of them, but another one or a few other things that I want to make sure we touch on are the boilerplate stuff.
Andrea: [00:09:52] So a lot of people want to actually remove the boilerplate stuff and don’t know what it means, blah, blah, blah. I highly suggest not removing it. Force majeure. When COVID hit, that was a shit show because a lot of people did remove it or they changed it and then it came back to bite them in the butt because they had no idea what they were doing. So if you need explanation of these things, that’s what I highly suggest, having an attorney for. That way you know exactly what’s in your contracts. That’s what your attorney is for. And if you need one, we have a legal partner membership, highly trained attorneys that know how to serve small businesses. Now, a couple of tidbits about the contracts. Number one. You know that I’m a huge proponent of having an LLC. Once you have your LLC or your entity, if it’s a corporation, all of your contracts should be in the name of that entity. You are no longer contracting as yourself as an individual. Now when you sign the contract, you can you probably will be signing your actual legal name, but you’re signing that on behalf of the company you’re not signing. To contract yourself as an individual. You are binding the entity to the agreement, not yourself individually.
Andrea: [00:12:47] Those are great options, especially because they have an audit trail which can be really helpful in chargeback situations as well. And if there’s a lawsuit, not that there will be a lawsuit very, very last resort. But. It’s also a big bargaining chip to threaten like, Hey, if we have to sue you. We have your signature here. And a lot of states actually do have provisions where if it’s a breach of contract and there’s a written agreement, they have to pay like treble triple damages. They call it treble damages, but treble damages and attorney fees. So use a written contract. Now, what happens if you have a breach of contract issue? What I suggest is, of course, reaching out nicely and just, you know, reminding them of what’s in the contract. But when you’re part of the Legalpreneur membership, one of the benefits is being able to cc your attorney on the emails. So a lot of times when clients go come to us or their attorney and they are like, Hey, this client hasn’t paid or this happened or this happened. You know, we tell them, Hey, make sure you do this like follow up a couple of times and then. Say, Hey, you know, so I haven’t heard from you. I don’t want to take this any further. However, I’ve seen my attorney here. If I don’t have payment by X date, I’ll have to take the next steps.
Andrea: [00:14:11] The fact that an attorney is cc’d most of the time they’ll go and look and see the website. I’m like, Oh shit, they are a legit attorney, so let me just get this taken care of because they don’t want to hear from a lawyer. Like that’s everybody’s worst nightmare. So just in the legal membership, the fact that you can CC your attorney. So many people love having that benefit because they don’t even have to do anything. Most of the time it just solves itself. When you send an email and it’s like, Oh, my attorney actually is here because a lot of people just bluff about it. They’re like, Oh, I’m going to have to get my attorney involved. And I when people say that I actually had a client recently who they had a disgruntled client and they were like, I’m going to get legal like or I’m going to pursue my, you know, call my attorney did it. And I told my client, I said, Well. Tell them like CC me on the email and just say, hey, have them contact me. And of course my client never heard from the other party again because oh shit, they actually do have an attorney, so. Don’t. Think that just because somebody hasn’t paid, they’re not going to pay. There’s so many remedies when there when there is a breach of contract, whether it’s somebody hasn’t paid or they haven’t performed, whatever it is, there are so many remedies available without having to sue.
Andrea: [00:15:35] So, again, another huge benefit of the legal. Membership, which if you haven’t heard. The membership is discounted from now until the end of the year, almost 50% off are I. My goal is to just serve as many business owners as possible and I want to make sure that the membership is as affordable as possible. So it is discounted from now until the end of the year. Make sure you get in before that price goes back up, because I don’t know if we will have prices as low again. All right, That’s contracts. I hope this is beneficial. Let me know what you think. And again, shout me out on Instagram. Screenshot this episode. Tag me. Let me know your favorite part and I’ll see you all next time. I am so excited to share with you that from now until the end of the year, you can sign up for the Legalpreneur membership for almost half off. It is normally 349 a month or 3499 for the year, but from now until the end of 2022, you can sign up for 199 a month or 1999 for the year. You get all access to your own attorney, unlimited emails, 130 minute phone call, a month, document review, access to all of our contract templates, plus a discount on additional services.
Andrea: [00:16:52] And once you get started, we get you rocking and rolling with a business audit, which is where we outline exactly what protection you currently have and what protections you still need. We lay it all out for you. That way you can get started working with your attorney, knowing exactly where your relationship is going. Get signed up. The link is in the show notes and we are so excited to serve you in the Legalpreneur membership. Here at Legalpreneur, we’re committed to providing a supportive legal community for all business owners. I know how scary the legal stuff can be. If you found this information helpful, I would be so grateful if you could share it with the fellow business owner. And quite frankly, it doesn’t cost anything to rate, review or subscribe to the show. Your support helps me reach more listeners, which allows me to support more business owners in their entrepreneurial journey. Have any questions or comments about the show? Feel free to drop me a line on Instagram. I promise. I read all of the messages and comments, and if you want to be a guest on the show or know someone that would make a great guest, simply fill out our application form and a team member will reach out if we think it’s a good fit. I’ll see you in the next episode.