How to ensure your contracts are enforceable

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I’m asked frequently – and by frequently, I mean FREQUENTLY – “how do I ensure that a contract is legally enforceable?”

You may think that legally enforceable contracts need to be really long and complicated, and use words like “heretofore” or “witnesseth.”

But, they don’t. And you don’t need to fear them.

Believe it or not, contracts only need three things to make them enforceable. And, you don’t need to use any magical “legal” language.

Sidenote: Once you finish, read how 4 freelancers built recurring revenue models that changed their business. You'll love it.

All you need is an offer, an acceptance of that offer, and consideration. If you have these three things, you have a legally enforceable contract.

Now, that’s not to say that you shouldn’t include other provisions in your contracts.

You should.

For example, you need provisions to ensure that you get paid, to address the scope of work, and to protect you in case your client turns out to be the client from hell.

But for right now, let’s look at the minimum required to make a contract enforceable.

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Offer and acceptance

The offer and acceptance are two elements that are pretty straightforward.

First, one party makes an offer to another party to start the ball rolling. For example, you may offer to write three articles in two weeks for $1,000.00.

This offer is communicated to the client, who either accepts it (yay!), rejects it outright (boo!) or makes a counteroffer, in which case the ball is in your court to accept, reject or make your own counteroffer.

Pretty simple, right?

It is, but remember that both parties must specifically agree to the offer and acceptance.

In other words, the offer has to be specific, and the acceptance must be an acceptance of that specific offer.

So, if you make an offer to write three articles within two weeks for $1,000.00, and the client comes back and says, “I accept your offer to write three articles for $1,000.00 which you will deliver within the next week,” there is no acceptance, and no agreement.

Why? Because your client has made a counteroffer. You offered to deliver the articles within two weeks, but the client wants them within a week.

Bottom line: the parties must understand the specific offer, and the acceptance must mirror that offer.

Consideration

Consideration sounds complicated, but it isn’t.

For our purposes, it’s really, really easy to understand. Now, if we were in a contracts class in law school, the professor would do his or her best to make this a confusing topic.

But we’re not going to do that.

Put simply, consideration is what each party gives to the other party.

This is where our hypothetical professor would talk about “detriment” and whether a “peppercorn” would be sufficient consideration for mowing a field. But we’re not here to discuss theoretical concepts.

Take a look at our simple offer and acceptance above and see if you can identify the consideration.

For you, the freelancer, the consideration is the work you promised to do – the three articles in two weeks. That’s what you promise to give to the client.

For the client, the consideration is the $1,000.00 promised you for the specific work you said you would do.

Simple. Right?

And that’s it. That’s all you need to have an enforceable contract.

But, we need to go a step further to make sure you are protected.

And that leads me to another question I get asked A LOT: should contracts be in writing?

In a word (or three)…

YES! YES! YES!

Written contracts are critical

To ensure that you can enforce your contract containing a specific offer, an acceptance of that specific offer, and consideration, it must be in writing.

Now, oral contracts can be enforceable. But, certain contracts, such as for the sale of real estate, must be in writing.

However, regardless of the type of contract, I advise my clients to ALWAYS have a written contract in place before beginning work.

There are several reasons for this, but the most important is to protect yourself if you get into a dispute with your client.

With a written contract, if your client claims that something was part of your agreement, but it wasn’t, you can point to the contract to show the client what you agreed to.

For example, let’s say that you enter into the agreement described above – you’ll write three articles for the client in two weeks for $1,000.00. And after the first week passes, the client calls you and demands that you deliver the articles.

With an oral contract, you won’t be able to show the client the specific language which states that the articles are due in two weeks.

But, you can with a written contract. You can also show that to a judge if your dispute goes further.

And then you’ll probably come out a winner because the contract is legally enforceable.

You’ll probably also have an attorney’s fees provision in your contract so that you don’t have to pay your legal fees – the client, or former client will – if you win (this is another provision that you always want to have in your written agreements).

So, always, always, always, use written contracts, and make sure that they have an offer, an acceptance and consideration.

Conclusion

Contracts are meant to protect you as the freelancer and the client. Do you have experience with contracts (or not having a contract)? Share your experiences in the comments!

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About Steven Zakrocki

Steve Zakrocki is a Florida-based attorney who helps freelancers and other small business owners get paid and protect their businesses and families. He also runs the website Legal Ed for Freelancers, which is devoted to helping freelancers understand legal issues.

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Comments

  1. Great Article, Steven. I have a contract that I reduced down to one page. It used to be full of legal terminology and 3 pages long. I actually got the template online and modified it to my business. I find simplifying the contract to be a much better way of creating an agreement with your client.

    • Thanks Fabio. I think freelancers and other small business owners get intimidated by contracts because they think they need to be really complicated and include “legalese” – i.e., big words that only lawyers know the meaning of. They don’t. But you do need to make sure that you are protected. As I said in the article, what I discussed here is the bare minimum you need to make sure a contract is enforceable. There are other provisions that you need to include to make sure you get paid, for the scope of work, etc. Thanks for commenting!