The terms are the details that spell out how you are going to work with your supplier or customer and what’s expected of each of you.
These should include the general details such as who the various parties are who will be involved in the work, with their contact details and any firms they may subcontract some of the work to.
They will also include the specific terms you’ve negotiated such as payments, deadlines, insurance required and descriptions of the work to be carried out. If those terms aren’t met it could be possible to terminate the contract and ask for compensation or damages.
Terms should include any of the details you’ve discussed and negotiated such as (and they aren’t limited to):
- a description of the goods and/or services that your business will receive or provide, including key points such as dates by which certain parts of the work should be delivered, what materials should be used, what checks should be carried out, by whom and when
- payment details and dates including any arrangements for paying for materials or labour in advance or for paying in instalments
- key dates and milestones such as first drafts or designs by certain dates
- required insurance and indemnity provisions
- details of any damages or penalties that would be paid if things go wrong or lag behind
- renegotiation or renewal options if something changes, for examples materials increase significantly in the course of the project or become impossible to find
- complaints procedures and dispute resolution processes
- the conditions under which the signatories to the contract can terminate it
- any special conditions that have been agreed.
The clearer the terms are set out in the contract and the more detailed they are they more change is that mix-ups and misunderstandings can be avoided and that the whole project will proceed smoothly. It’s much harder to be sure that all the I’s have been dotted and the t’s crossed if the contract is verbal and if there is a dispute it’s harder to prove what was agreed if there isn’t a written contract.