Avoiding Contract Controversies
Do you get frustrated because you feel your client has not read your contract? Are you sometimes left wondering why a client has not responded once they received the contract? Or worse, they decide not to hire your firm and you feel it was something in “the contract” that did it!
There are two key issues that I feel will solve these problems. First is having a well-developed contract (reviewed by your attorney), and second is how you deliver it.
So having a great contract is extremely important – but there is no “one size fits all”. The legal parts of the contract can be the same for every contract, but the “meat” of the agreement is the Scope of Services and what each party’s responsibilities will be. If you have done your homework and effectively interviewed the prospective clients you should be very clear as to what services they want you to cover. Along with that you want to clarify the responsibilities of each party so there are no misunderstandings later. Communication is most often the culprit in any dispute and having it in writing is critical. I like to say, when in doubt, write it down.
Having said that, verbal communication is also important as so many problems are solved, or avoided by clarifying that what you heard/read is truly what the other person said/meant. So this leads us to the second issue which is how you deliver the contract. I recommend that you never just send off a contract to a client – whether by “snail mail” or electronically.
In a perfect world you would personally deliver the contract to the client and sit down and go over it with them – and as you do so, you periodically stop to ask if they would like anything clarified, do they have any questions, are there any adjustments needed, have you captured everything they want your firm to handle and basically making sure that they understand what is written and it meets their expectations.
But in today’s world your client may not live in your area or even in the same country, so you move to Plan B. What that involves is arranging a and set a phone appointment with the client and using a service like Go To Meeting. This type of service allows you to talk to the client while sharing your screen where you have pulled up the document. You can then review it with your client, make any adjustments necessary, and then send it off to them at the end of the call.
Taking the time to always review the contract “in person” with the client gives you the opportunity to address any misunderstandings immediately. Learn to send effective messages while being an effective listener – and never forget the value of feedback. As George Bernard Shaw put it, “The single biggest problem in communication is the illusion that it has taken place”.
In doing this I have felt a bit awkward. Does one of us read it out loud to the other, or do we both sit together reading silence? I am never sure what is the “comfortable” thing to do. If I read it aloud, it feels like I am treating my client as if they are a kindergartner.
What do you think is best?
Thanks,
I read my Letter of Agreement (so titled to remove the harshness of the contract’s formality). I pause at each paragraph to see, and ask, if there is further clarification needed. Often a client will state that all is understood. At that time I bring up one or two issues that others have questioned and I ask again if there is any further clarification needed. Usually there is additional discussion at that time.
As opposed to reafing the agreement verbatim, I often go through the agreement explaining the paragraphs. I would say something like ” The next 3 paragraphs covers our fees. Our first billing of $$$ covers ABC, which is due today. Then if you would like us to handle XYZ, that will additional charge of $$$” At the end of discussing those paragraphs, I would ask a question pertaining to what was covered to make sure they understand and is paying attention. I may ask something like ” Would you like to set-up recurring payments on a designated card? I make this more a discusion than just reading which can be very uncomfortable for both of us. I never allow them to brush it aside saying they will read it later. I respond with ” Oh, oh I wanted to point out something”