When it comes to creating a legally binding contract or agreement, legal jargon and big superfluous words aren’t essential, rather, it’s the content of the contract that is the most crucial component.
Since there is no specific format that a project contract must follow, it’s the contents of the contract or agreement like terms, conditions and warranties that make it legally binding.
Making a contract easy to read and understand while ensuring it’s also straight to the point will ensure both parties know the ins-and-outs of the project’s contract. This ensures assumptions are kept at bay and disputes minimised, helping your project move to a successful outcome.
Basically, a simple and easy-to-understand contract that includes relevant and specific details about the project is key.
The essentials:
So, when you’re implementing a contract or agreement for your next project, you want to ensure the following key elements are included to be sure all your bases are covered.
Include the names and address of both parties
The first thing is to identify the parties involved in the contract. It is essential that the names of the entities involved in the project or business be spelled out.
This should also include any sub-contracting/ vendor arrangements that are involved in the project. It seems like an obvious inclusion, but it’s essential that the correct details be included in this part of the contract.
Cover the projects scope and details
It’s important to define the project’s scope and details in a contract and agreement to leave the other party with clear definitions of obligations and responsibilities.
Ensure all elements are covered here, taking care to include possible grey areas that could arise in the project’s future and who and what party would be responsible for each.
Details can also include key terms used within the project contract to ensure all parties involved understand what is included.
Don’t forget changes and cancellations
The contract should specify where changes may arise and how much change should be allowed. Every project tends to deviate slightly or significantly from initially agreed on scope, hence the need to include the possibility of this in the project contract.
Also, be sure to specify how many reviews or adjustments you want before the project is accepted and approved as completed if applicable. This is particularly relevant for creative projects.
Don’t overlook the duration
Most projects have a timeframe, so including these details about the expected completion dates and any details about contingencies should be included in your contract.
Include payment and deadlines
To avoid arguments and delayed expectations regarding when payment should be made, how much should be paid, pricing should be clearly stated and documented. It’s important both parties understand and agree upon the same payment structure.
Other contract details
While these are only the five essential parts of a project contract we’ve covered in detail, there are many more that should be considered and be included in a contract or agreement such as:
• Any required insurance and indemnity provisions;
• Details of ownership, Intellectual Property (IP) and copyright (especially relevant for creative projects);
• Renegotiation or penalty details;
• Processes for complaints and dispute resolutions;
• Termination conditions;
• Details of damages or penalty provisions; and
• Any other details like special conditions.
Use a platform to create seamless project agreements
One of the key reasons we built Agreemi is to help agencies, businesses and teams create contracts and agreements more seamlessly and intuitively that cover the essentials without navigating your way through word documents or emails.
The goal is to help you to spend more time delivering the projects and services where it matters the most. But most importantly, having contracts and agreements that are easy to understand, allows all parties involved to grow and adapt the agreements and the project changed, minimising any possible disputes or payment issues along the way.
Using Agreemi for project contracts will ensure you create contracts and agreements that work for both you and your clients, allowing a centralised repository for you to send for signing, track deliverables, manage variations and onboard clients quicker.
Closing thoughts
While a project contract can be structured to suit your needs and that of your client or contractor, it should be detailed and explicit enough to avoid misunderstandings, but also flexible enough to allow for the amicable resolution of disputes.
Good working relationships can be built through effective agreements and contracts resulting in trust-building, repeat partnerships and long term clients. This will help you to increase revenue and profits and accelerate the growth of your business.
Note: This advice is general in nature and professional and legal advice should be sort first.
