Contract formation is one of the most important skills a small business owner can develop. And one of the main skills you will probably need when mastering this skill is understanding certain legal terms when you come across them.
As we discovered in the article Haggling and Bickering: The Need of Concrete Service Contracts, the most important aspect of contract formation, for most businesses, is the choice of terms and conditions.
Professional Photography Contract Forms are a fantastic starting point for contract drafting, but, unless you have the most unvaried business in history, no form that you can obtain is going to fit your business exactly.
Two Different Families of Terms and Conditions
There are two distinctly different families of terms and conditions in the world of contract formation. These two families are distinguished by courts and lawyers as either boilerplate or dickered.
First Family of Terms and Conditions: Boilerplate Terms and Conditions
Just what is a boilerplate? The word boilerplate originated as a term describing huge rolls of plain flat metal that would be shaped into many nearly identical steam boilers. In the legal world, this term is used to describe a family of contractual terms and conditions that will appear in several similar contracts in identical form. This is the family that should include many of your basic business policies and procedures. Boilerplate terms are usually very general and can easily apply to almost any client that walks through your door.
One of the keys in using this type of terms is to word every entry as an agreement. Anything that is simply listed as a general practice or policy can be interpreted by a court to be simple informative information rather than a part of the contract.
Incorrect: “Acme Photography’s policy is to require a completed official order form before delivering any prints.”
Correct: “Due to the general business practices of Acme Photography, the client understands that a completed official order form must be returned to the photographer or to the Acme studio in order to receive any prints.”
Another key to using boilerplate terms and conditions effectively is to be certain that they are entered in such a way that the client is aware that they exist. One of the worst things you can do is to have these terms buried in the contract in such a way that the client can ignore them when signing on the dotted line. That means that these terms and conditions should always come before the signature line and should always be written in the same font and size as the rest of the contract.
Right about now, many of you are probably wondering why you would need to work with boilerplate terms at all if you buy a form contract. The answer is really quite simple.
Form contracts are generally just templates to help you create your own contract. Many of the terms included, if any are included at all, will be so generic that they only cover the most basic requirements of your business, but chances are that the forms simply leave blanks that you will need to fill in on your own. If you just cut and paste from someone else’s boilerplate, then you are very likely to include terms that do not apply to your company as they are written. In those cases, there are a few dangers of which you should all be aware.
This is why it is super important to have a contract that is applicable to your industry and situation.
If the terms indicate a certain feature of a company that your business does not possess, then a court may completely remove a boilerplate term that you want to enforce from your contract. Another, and perhaps more severe, danger is that you may have indicated a responsibility that you are not adequately prepared to handle. In that case, you may be forced to expend large amounts of money and time in order to live up to the responsibilities included in your contract.
Correctly formatted and appropriately worded boilerplate can be the difference between having a clear understanding with your client about how your services will work and one of the biggest professional headaches you have ever experienced. Read through them carefully after filling in your forms and be sure that everything included applies to your business.
Second Family of Terms and Conditions: Dickered Terms and Conditions
So, now that we understand the basics of boilerplate terms and conditions, what in the world does the word dickered mean?
Dickering is essentially the same thing as bargaining. This word simply refers to terms and conditions that are specific to an individual contract or client and have been discussed as part of the contract. This is the most important family of terms and conditions that will be included in any service contract you use. These terms should include all of the specifics about your arrangement with a client.
So, now that you understand what dickered terms are, how exactly do these terms and conditions wind up in your contracts?
These terms and conditions come about through the dickering, or bargaining, process. As a part of this process, you will start discussing a particular project with a client. The client will let you know that they are looking for help with setting up a shoot of one kind or another, and you will begin discussing the details of exactly what that particular client needs. As you come to an understanding of what the client wants and needs, you should pay special attention to giving them specific expectations as to how much those services will cost when you will be able to perform the shoot and when the editing and printing (if applicable) will be done. Once you have come to a mutual understanding of the services that you will be performing, you should include them in your form contract, in order to customize the contract to that particular client.
Putting the Knowledge to Work
Okay folks, now that we have discussed the two main families of terms and conditions, many of you might be wondering how we take those concepts forward and make them work for you.
Common Mistakes Made When Filling Form Contracts
Form contracts are an invaluable resource for small business owners who can’t afford to hire an attorney every time they need to execute a new service contract, but, if you aren’t careful when using your form contracts, you can make very big mistakes. There are two very common mistakes that people make when filling in terms and conditions in the form contracts that they obtain.
First Mistake: Not Being Specific Enough
When you fill in forms, it can be a very real temptation to just go through the motions and get done as fast as possible. In some cases, that temptation can lead you to write some contract terms or conditions in such a way that they are not easily understood by anyone other than you and client. While that might not present a problem when everything goes according to plan, that can have devastating effects on the validity of your contract if something goes wrong. The last thing you want is for a court to try to interpret your contract when they don’t understand how the photography business operates day to day. The simple solution to that potential nightmare is be precise. Including a reasonable number of specifics can be your best friend, especially in your dickered terms and conditions. Do not let anything in your contract be unclear or ambiguous.
Second Mistake: Not Being Concise
I know; these two things sound like polar opposites, but they aren’t. Each entry in your contract should be detailed and specific, but it should also be short and to the point. You don’t want to have to wade through a lengthy paragraph of text in order to find the important details of a term or condition.
So, how do we reconcile these seemingly different concepts? The answer to this question is surprisingly simple. Eliminate ALL complex or compound terms and conditions. If you write a term that includes a condition within it, first, reword the term to eliminate the condition; then make a new entry that describes and details the condition. If there are several interrelated terms and conditions in a certain section of your contract, detail the main point; then use an outline format to create sub-points for each individual term and condition.
The short rule to remember about being concise in your contract drafting is that you should think of the contract more like an outline than a book. You are not writing a narrative; you are providing yourself and your client with a skeleton around which to wrap your interactions.
So, that’s that, photographers!
Filling in your form contracts is a skill that you need to develop, and a better understanding of the basics of dickering and bargaining with your clients should help you make your forms more effective.
Always double check that your terms and conditions are actually applicable to each client, and always remember to be specific and concise. Happy contracting, everyone!
Need more help? For information on how to work with template contracts you can get real and indepth advice in BizRevamp – the biz webcourse for photographers – a TheLawTog course.