Start-ups work with small teams, and building personal relationships with vendors, clients, and other professionals can go a long way toward growing your reputation and your bottom line. But when you rely on these relationships for business dealings instead of putting things in writing in a contract, it can create problems. Ensuring that every agreement you make is outlined in a legally binding contract can help you protect your interests and ensure that the terms of the agreement are clear.

If you need help drawing up contracts or reviewing those from other business associates, InPrime Legal can help. Our team is experienced in employment and business law, which makes us uniquely suited to create, review, and negotiate contracts of all kinds for start-up businesses.

Do Start-Ups Need Contracts?

As a start-up, it can be tempting to avoid contracts, whether you’re afraid of scaring off clients who may not want to sign or you don’t want to complicate personal relationships. But business transactions need to be as clear as possible, and it’s important for both sides to understand what’s expected. A contract includes terms for how and when you’re going to be paid, what services are being provided, and the scope of work.

Depending on the industry your business is in, you may also need additional terms. For example, a start-up that is offering content creation services for clients may have a provision in the contract that outlines whether the company can use the work as samples for other clients. Nondisclosure agreements, milestone payments, and kill fees may also be included in contracts.

What Are Some Examples of Common Contracts for Start-Up Businesses?

Start-ups work with a variety of professionals, which means they also deal with several types of contracts. Here are some of the most common contracts start-up businesses may see:

  • Employee contracts, which outline terms of employment, including the category of employee, how much and how often the worker will be paid, and whether there are any benefits connected to the position
  • Nondisclosure agreements, which ensure sensitive business information stays private
  • Terms of service, which inform users how their data may be used and what they’re agreeing to by continuing to visit a website or use a service
  • Vendor contracts, which define the terms of business when working with other suppliers and businesses

What Can Happen If You Do Business Without a Contract?

When it comes to business, if it’s not in writing, it didn’t happen. It’s crucial to ensure that every aspect of your business that requires working with clients or vendors is covered by legally binding contracts. This ensures both parties are clear on what their responsibilities are, and there is a document to refer back to if there are questions or issues later on.

If you do business without a contract, you’re opening yourself up to an increased risk of financial losses and other legal issues. For example, if you take on a client but don’t have a contract and a signed scope of work, you could end up with the client requesting far more work than agreed, costing you money and potentially the client if they aren’t happy with the final product.

Do You Need an Attorney to Review Contracts?

If you have a strong background in business and are familiar with contracts, you may wonder if you can skip working with an attorney, but this isn’t a good idea. Attorneys experienced in business and contract law are able to spot vague wording or potential issues in a contract that you might otherwise gloss over. Having your own attorney create and review contracts also ensures that they are in accordance with state and federal law and that your business’ interests are protected.

At InPrime Legal, we work with start-ups in Marietta, Georgia, and the surrounding area. Our team is experienced in all types of business contracts, and we know what to look for to ensure any contract represents your interests and protects your business from potential risks and liabilities. Call our office at 770-282-8967 to find out more about the services we offer and to schedule your first appointment with one of our attorneys.