Take the “Con” Out of Contracts

Dear Thank You for Not Wasting My Time,

Do I need a contract with people I’m about to work with? I’m afraid they’ll think I don’t trust them if I ask for one. Contracts give me a stomach ache. 

Signed,  Contract Concerned

Dear Contract Concerned,

The first time I ever got a cell phone, I read the massive contract over while my friend, who came with me, apologized to the salesperson. She thought it was unnecessary that I was reading the contract through, but I wanted to know what I was getting into. 

Whether it’s been for an apartment, a car, a cell phone, forms in a doctor’s office, or a job, people always act surprised when I read a contract. They’ve said things like, “You’re still reading the contract?” Or, “Just sign it. No one actually reads it.” If I ask questions, it’s even better. They’ll respond: “Huh. You’re the only personwho’s ever asked about when you’ll get paid.” Or: “No one’s asked about keeping their information private, except you.” 

When someone says “no one else” has done something before, or asked for something “except you”, I always feel a combination of embarrassed and I’m onto something.

But when I get the answer to my questions, I end up getting to spend my time better because I don’t have to spend time on confusion about things that were already figured out.

Contracts are amazing timesavers. They’re the closest thing you have to seeing the future. Unless you have a Magic 8-Ball, of course.

Contracts are written out agreements. If you haven't seen one, generally they contain things like: Who the agreement is between, what the work or service actually includes, what’s being paid to who, and when. Who owns what, and what the dates are for the whole thing. They also can include how things get handled if things go even better than expected, and how things will get handled if there’s a big problem. 

Contracts aren’t a threat, they're not about two opponents trying not to get conned, they’re one agreement for multiple people to save everyone time. Don’t you want to know what you’re about to agree to put your time into? 

They’re clarity creators. And what have we learned about clarity?

Clarity saves time!

So let’s take the “con” out of contracts.

Here are the top ways contracts are time-savers:

1. Contracts let you know what will be expected of you and what you can expect.

What a time-saver to know at the beginning of something new. If only we were handed one of these things when we were born.  

2. Contracts save time because they respect the work.

It makes everyone take the work that much more seriously without even realizing it. If you feel unworthy of a contract (as if it's too big a deal), you can think of it as not being about you, but about the project. 

3. Contracts save time because they establish respect.

Okay, now you can think of it being about you. The very fact that you’re doing a contract announces that your time and your participation are valuable. That subtle announcement is important. No microphone necessary. 

4. Contracts protect you from time-scramble burn-out. 

Wanda enjoyed her job until she encountered what’s called “Scope Creep”. More was asked of her beyond the original scope of the job without more pay. Before she knew it, there wasn’t enough time in the day, her schedule was a big scramble, and she was exhausted from the anxiety and resentment of having too much to do without being compensated for it.

Then she remembered she had a contract. Yay. She talked to her boss and mentioned what was in the contract - and what wasn’t. She said she either needed to decrease her duties or increase her pay. They agreed to some of both. Her time became better spent not only logistically but because she felt so much better.

Of course, there’s being a team player, leaning in, and stepping up, so you can always go above and beyond anytime you’d like. But this way you’re making a choice to do more than you agreed to rather than feeling taken advantage of. That gives you more time to enjoy the whole experience. 

5. The contract process will time-save you by telling you something about who you’re about to work with.

Carla had an idea for a small business and brought on a partner, Lisa. Months into their hard work Carla asked, “Should we sign a contract?” Lisa said, “No, I’m always 50/50.” When the work was about to be bought (having done the work 50/50), Lisa insisted that she get more than that “50” and that she should have a higher position in the company. 

When Carla reminded her of her 50/50 verbal agreement, and that it was originally her idea anyway, Lisa said, “Things change.” The project and their relationship came to an end after over a year of devotion and commitment. Carla could not get back that time, not to mention the additional time it took to recover from the disappointment.  

Beware of resistance like this from someone else: “I don’t need to do a contract. I trust you…”, or “Don’t worry, I’m not going to screw you”, or “(sigh) I didn’t think we’d need lawyers for this.” If you hear anything like that, definitely do a contract. These phrases either indicate inexperience, avoidance, or cheapery.

If the other person is resistant or blows off the idea of doing a contract, you have to ask yourself: Why aren’t they saying an enthusiastic “Yes”? You can ask them that, too! 

6. Contracts clue you in on your rights. 

It’s a huge time saver to know the rights you do have, and the ones you don’t. That’s important down the road when there's a sticky situation and you’ve forgotten that these things were already figured out. You can simply refer to that fantastic piece of paper. It could be an apartment lease stating what they’re responsible to repair, or how much time a company gets before they pay you. It’s easy to forget the details of a relationship, and you can refer back to it when you need to. That saves time on frustration, checking your mailbox for that check every five minutes, and getting straight to the solve. 

7. Contracts prevent miscommunication. 

Both parties might think they’re agreeing to the same thing but don’t really know until they’ve seen it written down. Huge Timesaver Alert because miscommunication about big things like who’s doing what can lead to tension and disillusionment, and then that easily snowballs into everything else in life, and before you know it you’re mad at your phone for running out of battery with a spiraling: “What else could go wrong!?” I want you to be saying “What else could go right!?”

8. Contracts define roles. Listen up friends-getting-into-business-together!

It might be uncomfortable to do a contract with a friend but that’s where it’s even more important. A contract helps establish a healthy working relationship. It establishes that you have to put on your business hats when it comes to responsibilities and decision-making. You don’t want to find out too late that you don’t have the same work ethic, or pace, that you thought you would because you did shots together every Friday after work at the corner bar. 

In fact, that’s where Suzanne and Jack came up with their business idea. They were long-time friends and drew out an idea on a napkin at a bar. They decided to go into business together and it was a rocky start. Months into difficult communication and confusion they realized Suzanne expected to work together every day and Jack expected they’d work when they could. The idea imploded and so did their friendship. 

Contracts, especially for friends, also give you an important, official beginning. “Oh, I thought you knew I had three other projects I’m working on!”

9. Contracts take the blame.

The other party wants you to do something not outlined in the contract? Not your fault, it’s the contract. “What can I do? It has it in the contract this way.” You can suggest adding an “addendum”, an additional agreement, to the contract. 

If you’re someone who has trouble saying no, definitely do a contract. It helps you with your limits.

10. Saves time if a third-party (someone else) takes over. 

Jasmine initiated a project and got some free help from Luke. They signed a contract so if it were to ever sell, he’d get credit and be paid for his work. When someone did make an offer, the contract was honored, no questions asked. Yay. If there wasn’t a contract, the buyer could have easily dismissed Luke, and Jasmine would have had to spend time and energy fighting for him. Because there was already an agreement in place, it saved everybody time. 

A contract relieves both parties of the burden to fight on behalf of each other when someone else gets involved.  

Meanwhile, across town, Trevor did not have an agreement with his business partner and when their project was about to be sold, an investor kicked him out to save money, which crushed the project, and the project that had blossomed through time and hard work ended up in The Time-Waster Bin. 

11. Contracts secure commitment. 

People forget. Things come up and they can’t complete the work when they said they would. People jump in not knowing what they’re committing to. This doesn’t necessarily happen because everyone’s shady, but because the parameters weren’t defined on paper and agreed to with your signatures. Contracts launch both of you being in this commitment together, on the same terms, and with the same goal. This is a good thing.

12. Contracts define ownership. 

This can feel like a tough one to discuss because you really have to figure out who’s in charge. That’s why it’s so important to establish early on. Who owns the thing? If you’re splitting it, how much per person? Who’s making what decisions? Figuring this out at the beginning reduces powerplays, confusion, anxiety, and decision fatigue. 

13. Contracts weed out the nonsense. 

You’ll see how serious the other party is. Julia was asked to join a new venture where she’d get one-million dollars in stock options, and if it wasn’t successful, she’d get one-million dollars. Is it a surprise that contract never arrived? 

To wrap it up, think of it this way:

Contracts establish that you both think the thing you’re agreeing to is going to work!

When your time is saved with a contract, your time gets to be spent in innovative, creative, problem-solving ways which everyone involved benefits from!

If you’re not used to Lawyer Lingo, the words that make contracts seem so tricky, it can be intimidating to decipher. Let’s face it: “Heretofore” and “in perpetuity” slows down the read. Take time to read the contract anyway, and do your best. You’ll get the gist of what you’re agreeing to. By the way, “in perpetuity” means “forever”. Why not just use the word “forever”? 

If the what you want and what they want (the “terms”) just can’t be agreed on, then you’ll know it wasn’t the right fit after all, and you just saved yourself time. If your block is that you don’t want to hire a lawyer, look for templates on-line or ask someone who’s done this particular kind of thing before for an example. 

If it’s talking about it that’s the block, you can say something like, “We should do paperwork.” Or, “I usually like to put together a contract so we each know what to expect.” If the word “contract” gives you a stomach ache, call it a “Deal Memo” or an “Agreement”. “It’s clarity for both of us.”