When buyers and sellers enter into business agreements, does one have a greater
responsibility to uphold their end of the bargain than the other? Does the old
axiom of "buyer beware" always pertain to all forms of contracts? Are consulting
contracts or independent contracts any different from some of the more standard
contractual arrangements found in the business world? Some answers to these
questions might go a long way to help better understand what business owners
need to know about contractual rights.
To begin with, it's important for
business owners to understand the importance of contractual arrangements in and
of themselves. Any business dealing you enter, whether it is the hiring of an
employee, or the quick delivery of a routine service or good, involves an
implicit contractual arrangement that comes with duties and obligations for all
sides. Even if it's a verbal agreement, or a handshake deal, a contract is a
contract is a contract. And all contracts lay out the responsibilities of all
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the parties involved ?no matter what.
Its why, whenever possible, smart
business professionals should be in the business of pulling out those contracts
whenever entering into a business arrangement with someone else. Whether they be
consulting contracts, independent contracts, or any contract you can think of,
if you have one ready when entering into important business transactions, you
can avoid disputes and hassles down the road that can cost you in terms of time,
money, and even prestige.
Now, the basic principles behind a contract
are pretty straight forward. When parties enter into some sort of contractual
arrangement, whether they be between a buyer or seller, or between a
professional and a client, terms are essentially worked out detailing the duties
and obligations associated with each party of the contract. To put it in simple
terms, the buyer is supposed to pay for a good or service according to an
arranged time frame, often when the job is done. The seller has to provide that
good or service also in accordance to what's worked out in the contract. The
more specific those obligations are, the more rights the buyer ends up gaining
for themselves.
It's perhaps this aspect of things like consulting
contracts and independent contracts that don't get as much scrutiny, especially
from the perspective of the buyer. Although what constitutes a seller and buyer
can be as various as the kinds of business transactions out there, normally it's
the buyer who is at least seen to be in a position of some vulnerability. It's
probably where the term "buyer beware" comes from. It's the buyer who puts up
the money and expects a good or service in return. Good consulting contracts,
for example, in fact help protect the rights of the buyer because they place
specific demands on the kinds of services to be received.
Getting back
to the question of who has the greater responsibility to uphold their end of the
contract, the buyer or seller, there are actually two basic components in
answering that question. One is pretty simple: the contract itself should spell
it out. The other one isn't so simple. It has to deal with the jurisdiction
you're in and the laws that apply to particular types of contracts like
consulting contracts and independent contracts.
Regarding the contract
itself, it should clearly spell out what both parties are supposed to do in
order to ensure the fulfillment of the contract. So, to the extent that the
terms for the buyer and seller are set out in the contract is the extent to
which one or the other has the obligation to fulfill the terms of the contract.
A one-sided contract for either buyer or seller, even with respect to consulting
contracts, will make the fulfillment of the contract a one-sided affair, too.
It's why all good contracts avoid such a set of circumstances.
Indeed,
part of the purpose of a good contract is to ensure that both the buyer and
seller are satisfied once the contract is complete, and that any potential
difficulties possible in the fulfillment of that contract be avoided. In other
words, while a contract can be seen as a tool by which others are forced to meet
terms, ideally speaking it should also be seen as an instrument of good customer
service. Good consulting contracts and independent contracts provide an
environment where both buyer and seller can feel more confident that their
purposes for engaging in the contract will be met. That's what a good contract
should ultimately accomplish.
Having stated that, some of the most
cleverly and mutually beneficial contracts in the world might not accomplish
what you think they might accomplish. On the one hand, there is the negotiation
and writing of the contract. On the other hand, there is carrying out the
legality of the contract once a problem arises. While a good contract should
clearly state the dispute mechanisms involved if a problem arises, what might
get in the way are the laws prevailing in your particular jurisdiction,
especially as they relate to the contract in which you're involved.
Contract law can be as complex as lawyer talk. You can have a contract
in place and believe that you have certain rights, but the law might say
something else about it. Ultimately, it's the law that decides how contracts are
to be carried out, especially if a problem arises. While these instances may be
rare, and are to be avoided with good contracts, you never really know what a
particular law has to say about a particular contract until a judge makes their
ruling. It's why some knowledge of jurisdiction and applicable laws can be
beneficial in the making of good consulting contracts, and might ultimately
decide whether it's the buyer or seller that needs to be aware.
