What is Customer Contract Drafting?
A customer contract is a legal agreement between a company and its client/customer. It outlines all terms for how products or services will be provided, creating clarity about various terms. These include pricing, expectations, and duties.
There are various reasons to draft a customer contract, such as that it reduces both parties' risks and ensures that all terms are legally valid.
Read the rest of this article to explore what key terms should be included in a customer contract, what mistakes to avoid when drafting it, and how a lawyer can assist you to keep it legally sound and transparent.
What Key Terms Should Be in a Customer Contract?
A customer contract should include the following components:
- Work scope. This should detail what goods/services the company provides to the customer.
- Payment. This section outlines the total cost and payment schedules that will be followed. There should also be a note on how late payments will be treated, such as with penalties.
- Duration. How long the agreement will last, with start and end dates, provides clarity for both parties.
- Revisions. If the final product needs to be revised, there should be clarity on how this process will occur.
- Termination. How either party can exit the agreement, along with required notice periods, must be stated.
- Confidentiality. This outlines how sensitive information, such as trade secrets, must be kept private.
What are Tips for Drafting a Customer Contract?
While you might have the above key terms written down, there are some additional things to include in your customer contract to make it thorough.
- Exclusions. While your contract might mention what services are included, it should also specify what isn’t included to prevent misaligned expectations.
- Service suspension. To protect the company and provide clarity for the customer, the agreement should specify what will trigger service suspension, such as non-payment.
- Renewals. Instead of automatic renewals, which can be risky, there should be a renewal notice period outlined. This enables both the company and customer to assess if they wish to extend the contract.
- Limitation of liability. This should clearly state what damages will be covered and excluded to protect the company against unlimited exposure for customer claims.
What are Common Mistakes to Avoid in Customer Contracts?
To avoid financial and legal problems, there are certain errors to avoid making when drafting a customer contract. The most common ones include the following.
Vague Wording
There could be vague or inconsistent wording in the agreement that creates confusion between parties. This makes it challenging to provide high-quality services and it can lead to disputes.
Inconsistency
The customer contract should be aligned with other business contracts and marketing efforts to avoid creating contradictory promises that can harm a company’s brand reputation. It also avoids legal liability due to issues with non-compliance.
Lack of Dispute Resolution
It’s easy to assume that you won’t need a section in the contract that clarifies how to resolve disputes. This can put you at future risk of expensive, lengthy litigation.
To protect both parties, you should clearly state where and how disputes will be resolved. Include a jurisdiction and venue so that both parties know what laws apply.
You also want to specify an alternative dispute resolution method, such as mediation or arbitration, so that going to court is a last resort.
How Can a Lawyer Help You Draft a Customer Contract?
Without a legal background, it can be challenging to make sure that you don’t miss anything important when drafting a customer contract. Here’s why hiring a qualified lawyer is worthwhile.
- A lawyer will customize the contract to your business, industry, risk profile, and jurisdiction.
- They’ll reduce your legal risks, such as by limiting your liability and clarifying all payment terms.
- They’ll make sure the contract is enforceable, such as by checking that it complies with all relevant laws.
- They’ll consider future risks you might encounter, such as scope creep and termination rights, and include provisions for how you can handle them.
- They’ll save you money. Although you’ll typically have to pay a flat fee for contract drafting, this will save you much more money that you’d have to pay to defend a lawsuit.
- They’ll create a professional experience with your customers. They’ll provide a contract that’s professionally drafted and makes negotiations more efficient.
Where to Find a Lawyer for Customer Contract Drafting
If you need a qualified lawyer for help with drafting your customer contract, you don’t have to spend a lot of time searching for one in your networks or by cold-calling traditional law firms. Online legal networks make the process much easier.
ContractsCounsel is one of the largest online legal marketplaces where clients can easily connect with a network of vetted lawyers who have experience in drafting customer contracts and other documents.
Here’s the easy process to follow when you want to request a drafting of your customer contract.
1. Go to the ContractsCounsel marketplace, where you can post your project for free. Add a few details of what you require so you can connect with the best lawyer for your needs.
2. Wait for lawyer bids. You’ll receive multiple bids from lawyers directly on the platform who can assist you.
3. Once you receive the lawyer bids, you should review the lawyers' profiles. There’s lots of info on the platform to help you choose the best lawyer, such as their location, client ratings, years of experience, and field of expertise. You can also view previous projects they’ve completed on the platform.
4. Connect with a lawyer you think is best suited to your requirements and hire them to draft your customer contract.
