Why have a contract? If you have an agreement in principle, next you need to be sure that it is going to give you the benefit that you want – and that’s where the contract comes in. Getting the contract right is key: it gives you certainty about what’s meant to happen, and it sets out what will happen if things go wrong.
The most important thing is that both (or all) parties are clear about everything they are agreeing to. A contract ensures that there is no doubt about that later on.
Is a contract just a piece of paper? No! Contracts do not have to be physically signed to be legally binding – electronic confirmation may be enough if it is clear that it is intended to confirm agreement. But it may be good practice, especially if the contract has a high value, to have signed hard copies to avoid doubt.
Unless you agree otherwise, you should assume that the date of the contract is the date on which the last signature is applied. (If the parties meet to sign the documents, this issue does not arise).
And don’t forget – the contract is not a dead document as soon as it’s signed. Make sure that you and your staff or subcontractors review it regularly so that it remains a good guide to how the deal is going and how to head off any difficulties before they arise.
Read our guidance for the key questions you should ask yourself to get the basics of your contract right.
Keep it simple…