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Contract Templates FAQs

What is a contract?

Contracts are legally binding documents. They're "agreements" between the service provider and the client. The contract should include all necessary information for both parties to understand what is expected, by whom, how often it will be accepted or delivered, etc.

If there's anything that's not understood in the contract after reading it through thoroughly, then it needs to be clarified before signing off on a document that has penalties if its terms are violated later down the road.

Do I need a contract?

Absolutely. Without a clear foundation, the relationship could go sour and leave you feeling not just disappointed, but unsure about your work with all new clients. That's where The Contract comes in. Starting off on the right foot is so important!

Why wouldn't you want a client to know what they're paying for? You'll be protecting their investment and outlining the terms of your agreement, their expectations from you, your expectations from them, and anything else that should be clarified, such as deadlines and deliverables.

What is a contract template?

A contract template is a document you create and reuse to make writing contracts simpler. In your template, you can include common terms and clauses. These include your scope of work, deliverables, deadlines, payment details, and any dispute resolution process you may use. Once your contract template is complete, you can quickly change the details to account for each new job.

What should I include in a contract template?

A contract is a legally binding document that ensures that the agreed upon intentions of parties will be upheld. We can break contracts into various sectors: oral contracts, written contracts, unconscionable contracts, breach of contract and more. Here are some things to include in a contract template or service agreement:

  • Clear Payment Terms
  • Protection for your work (i.e., IP protection)
  • Good Foundation for Relationship
  • Fair Contract Length
  • Scheduling Unit or Window Agreement
  • Notice period before termination and timing
  • Intellectual Property Rights ensuring ownership and proper use of the created work

These are the basic elements of all contract templates. It may require other details for your specific industry and projects.

Should a contract template contain payment details as well?

Including payment details in your contract template is crucial, as it sets clear expectations about payment terms between the involved parties. A good contract template specifies the amount to be paid, the payment schedule, and the methods of payment accepted. Additionally, it lays out any late payment penalties or conditions for early payment incentives. For independent contractors, precise payment terms prevent misunderstandings and ensure fair compensation for their services.

Should a contract template contain your job description?

Yes, the contract template should definitely contain a job description. This is often listed under the 'scope of work' section. It articulates the specific tasks that the other party is contracting you to perform. The scope of work provides a clear understanding of what is expected, serving as the contractual basis for the services to be rendered. Including a detailed job description in your business contract template also ensures that all activities are performed in compliance with local laws and regulations. It's a critical component that helps both parties to align their expectations and responsibilities.

What makes a contract a valid, legally binding document?

Let's put aside some common misconceptions. Lawyers don't make contracts valid, people do. There are specific elements that qualify an agreement as legally binding. Here are the three main elements:

  1. There must be agreement between the two parties to create a legally binding contract. One party must make an offer that is accepted by the other party. Acceptance must be unqualified and final. Acceptance must be positive, and not 'silent.'
  2. There must be some exchange of economic value. In short, someone must pay for something that is done for them or sold to them. For most freelancers, this is where money comes into a legal contract.
  3. Finally, there must the intention to enter into a legally binding agreement. A family member saying, "I'll pay you back next week," is almost certainly not a legally binding agreement. A business buying app dev services from an independent contractor according to a project plan and delivery deadline, is a legally binding contract.

These three elements make a contract template into a legal contract. These could be present in an oral agreement, or done by email. However, we recommend a formal contract. Putting all the elements of a contract template into a legal document makes all the terms clearer for the independent contractor and the client.

What are the benefits of using a contract agreement template?

Utilizing a contract agreement template offers significant benefits for any business venture. Such a template can act as a robust foundation for legal contracts, ensuring that the payment schedule, service agreement, and specific terms of the business agreement are clearly laid out and understood by all parties. This clarity can prove invaluable, especially when forging new partnership agreements or drafting a sales agreement template. Creating your own contract, tailored to the nuances of your business, can provide assurance and protection for both you and your clients. However, it's always wise to seek legal advice to confirm that your contract aligns with current laws and adequately covers all essential aspects of your agreement.

Using business contract templates can save time for both parties involved by streamlining the negotiation process and ensuring all critical aspects of the agreement are predefined. Furthermore, employment contracts drawn from these templates contain standardized provisions, such as governing law clauses, which remove uncertainties and solidify the understanding between employer and employee. These templates work as a common starting point, enabling a quicker path to a fully-executed business contract, beneficial for all engaged in the agreement.

Who should sign a contract first: the service provider or the client?

There is no clear law about this. In short, the order a contract is signed does not affect its legal status. However, it may be better for you to sign contract agreements last. Here's why:

In a legal, technical sense, when the buyer signs the contract and gives it to the seller, that is an offer. It can be amended, rejected, or accepted by the seller. If the seller accepts it, then signs it, then the contract comes into force. If the seller signs first and the buy rejects the contract, then the first contract should be taken back before issuing a second one.

That's the legal, technical way of looking at. Let's get back to the simplicity of a service contract.

As we said, a contract must have agreement. No one is trapped in a contract that has been amended after they issued it. So if you sign a contract and send it over, the buyer can make changes but these are not legally binding until you countersign them. The same is true in reverse. If both parties agree, then exchanging the contracts can be done quickly, and the order isn't very important.

How can you use Indy's contract and agreement templates?

Once you register for Indy's service, you can edit and customize free contract templates quickly. In just a few moments, you can update your project deliverables, deadlines, payment terms, intellectual property rights, and termination terms.

If you have questions about your industry-specific contract requirements, seek competent legal advice.

The benefit of Indy's contracts is the connection to all the other Indy tools. You can connect your independent contractor agreement to specific client contact info, project details, proposals, invoices, and time tracking for hourly jobs. Indy gives you one place to get all your work done.

Why Indy?

You'll get access to powerful marketing, workflow, and payment tools, all in one place, so you can manage and grow your business.
  • Find templates for contracts, proposals and forms.
  • Connect your client information to projects, time tracking, invoicing, and messaging, all in one place, for a smoother workflow.
  • Find support, build your team, and network with other freelance professionals by creating an Indy Profile.

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