Why Use a Contract? Do They Mean Anything?

27 replies
I am not a copywriter (obviously), but I needed a headline to grad your attention. Hopefully it worked.

I have...well I had this client, that owes me $1,500 and we have a signed contract. He emailed me last Friday asking me to waive the May fees. He cancelled his services on May 7th, and per the contract, we need to notify each other and give 30 days written notice. I have had a lot of back and forth emails/calls between him and the call tracking company to get everything switched over, hence the whole 30 day thing, among other reasons.

The thing is, he's an attorney and says he is not paying. It's not the money, but the principle of how he is handling things.

So I ask, what is the point of having a signed contract?
#contract
  • Profile picture of the author fandbworld
    Yes I hate things like this, especially when it is a lower amount. Someone owes me 500 bucks, with a signed contract for guaranteed 1st page. Has just stopped communicating with me. Not worth small claims court cause it is so low.

    Annoying situations!
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  • Profile picture of the author Andrew H
    For $1,500 it is definitely a tough call if you want to go small claims court. Does he have any solid reason for not paying? Or is he just being a dick?

    Taking a lawyer to small claims court for $1500 probably will result in a massive waste of your time because they really know how to drag things out (which I'm sure you already know).

    I'de visit his office and clearly state that he owes you this money, and make it clear that you will be recovering the funds. Also, there are some small collection agencies that you can sell the debt to if you have a strong contract.

    Personally if I felt I wasn't 100% in the right I would give minimal effort to recover and then move on. However, if someone was trying to screw me over I would exert a decent amount of effort to recover the funds and make the other persons life tough.
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  • Profile picture of the author iAmNameLess
    Originally Posted by ADukes81 View Post

    I am not a copywriter (obviously), but I needed a headline to grad your attention. Hopefully it worked.

    I have...well I had this client, that owes me $1,500 and we have a signed contract. He emailed me last Friday asking me to waive the May fees. He cancelled his services on May 7th, and per the contract, we need to notify each other and give 30 days written notice. I have had a lot of back and forth emails/calls between him and the call tracking company to get everything switched over, hence the whole 30 day thing, among other reasons.

    The thing is, he's an attorney and says he is not paying. It's not the money, but the principle of how he is handling things.

    So I ask, what is the point of having a signed contract?
    The contract helps... its good to have and you might be able to pursue something with it. The main thing a contract does, is protect you. Yeah you might be able to go to court over payment issues but what you really want a contract for is for your protection. To protect you from liability issues, or if something happens to rankings and they want to sue you for missed income, or if a picture you use brings up a copyright infringement claim you don't want to be held liable. It helps to spell out scope of work so you don't get stuck doing more than you agreed on.

    So... contracts should be for your protection. When it comes to payment issues, it helps in that department, but are you really going to take him to court?

    I don't know the laws in your state, and I'm not a lawyer... but when it comes to most cancellation issues a contract with a cancellation clause itself doesn't mean that you're entitled to the full $1,500. However, if you had the contract worded properly you CAN add a cancellation fee for those that do not cancel 30 days in advance.

    So my advice... you're going to take a loss on this one. From now on, have your cancellation clause include a cancellation fee of 25% if not canceled 30 days in advance. Anything more than 25% gives the client a decent chance of fighting it, claiming the fee is unreasonable.

    Anyway... smart to have a contract, but even if you went to court over this, and even if you win... good luck collecting. Write it off as a loss, save the complaints and bad reviews and waste of time in court, and spend that time finding a new client.
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  • Profile picture of the author Aaron Doud
    I'd say this is a lesson learned on the difference between legal and enforceable. Contracts are great and all but in the end if the amount is small they become unenforceable simply due to logistics.
    • Does he legally owe you the money? Yes.
    • Will you likely ever see a dime of it? No
    • Would you win in small claims? Maybe (his connections might help him win)
    • Would it be worth suing him? Not at all. He would bury you in legal fees
    You learned a lot about how he runs his business and in the long run how he handled this and likely how he has handled others in this situation will cost him far more than the money he "saved" due to the bad word of mouth.

    Friend: "Know a good lawyer?"
    You: "Yeah _______ & _______ are great. Just avoid _______. (you tell story)
    Friend: Wow (and Friend will likely pass story along to others)
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  • Profile picture of the author bob ross
    Aaron and Nameless definitely know what they're talking about. I've lost tens of thousands of dollars over the years where I was clearly in the right but wasn't worth the time to pursue further.

    I was going to suggest the 25% cancellation fee like nameless said because I use that as well.
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  • Profile picture of the author tonywrites
    Like a couple of people have said...your time would be better invested in identifying better clients to pursue. Contracts are basically only as good as the people who sign them. And knowing that there are plenty of scammers helps you to build a better radar system.

    I've had similar experiences, and there wasn't even one where what was right won out over the cheating client.

    Move on. There are plenty of legitimate businesses who do this to you.
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  • Profile picture of the author digichik
    The only reasons I use a contract is because it makes me look professional and it spells out the terms(ex. only two revisions for web design, then they must pay additional fees).

    I've had prospects who didn't want to do business with me unless I had a contract, not that it has any real value or really offers any protection. It has helped in the cases of needy PITA clients that want revision after revision. I just have them review the agreement they signed.

    I have only had one client not pay me the balance. Not worth pursuing, I just wrote it off. Fortunately, I have my prices set in a way that I always profit on the front end and the back end is just gravy.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by digichik View Post

      The only reasons I use a contract is because it makes me look professional and it spells out the terms(ex. only two revisions for web design, then they must pay additional fees).
      I use a contract, but it's to spell out what is promised, and the terms of delivery.

      When someone cancels, I simply stop work, and they stop paying.
      If they cancel a few days after I got paid for the month, I work until the end of the month. (or the 30 day period, whatever they paid for)

      They don't need to give me any notice. Nobody ever would anyway. Would you tell an employee that you are firing them in 30 days? No.

      I never ask for partial payment for work I've done, because they are always paying me in advance. If they pay by the month, they are paying me at the beginning of the month, for work I'm doing that month. I never bill for work I've already done. Never.

      My payments are always automatically deducted from a credit card or checking account. I never have a collection problem. If they stop paying, I stop working.

      The contract is there so there will never be a disagreement.

      "30 days notice"? I understand the principle, but learn from this mistake and get paid at the beginning of the month.

      If you insist on sending an invoice, make the first month twice as much to always be a month ahead.

      ARRRRGGGGHHHHH!!!!
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      • Profile picture of the author sodomojo
        i would assume this means you have no subscriptions in place on their behalf, whether it be a white label SEO provider or something else, right?
        Originally Posted by Claude Whitacre View Post

        I use a contract, but it's to spell out what is promised, and the terms of delivery.

        When someone cancels, I simply stop work, and they stop paying.
        If they cancel a few days after I got paid for the month, I work until the end of the month. (or the 30 day period, whatever they paid for)

        They don't need to give me any notice. Nobody ever would anyway. Would you tell an employee that you are firing them in 30 days? No.

        I never ask for partial payment for work I've done, because they are always paying me in advance. If they pay by the month, they are paying me at the beginning of the month, for work I'm doing that month. I never bill for work I've already done. Never.

        My payments are always automatically deducted from a credit card or checking account. I never have a collection problem. If they stop paying, I stop working.

        The contract is there so there will never be a disagreement.

        "30 days notice"? I understand the principle, but learn from this mistake and get paid at the beginning of the month.

        If you insist on sending an invoice, make the first month twice as much to always be a month ahead.

        ARRRRGGGGHHHHH!!!!
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        • Profile picture of the author Claude Whitacre
          Originally Posted by sodomojo View Post

          i would assume this means you have no subscriptions in place on their behalf, whether it be a white label SEO provider or something else, right?
          That's right, I'm not paying for a subscription on their behalf. When they sign up, I pay for 5 years of a domain name. I always let that run out if they cancel. And I leave all the work I've done (videos, articles, blog posts) up.
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  • Profile picture of the author Mwind076
    We don't do contracts for this reason, they are completely unenforceable unless you want to throw money at them just on principle. We also don't do any work without being paid first. Does that cost us, not really. Those that don't want to pay upfront are not the type of people that understand the system and what we do, and are not good clients in the long run. I can't tell you how many people come to us, whine that we take our payment upfront, go away for a few months and then come back even further in the hole because they hired someone else that didn't know what they were doing...then they pay us upfront and usually they stick around for a while.

    Even if it's a recurring fee/monthly fee/payment plan, get paid before you do any work, and you won't have any issues.

    The 30 day clause doesn't make him owe you money, it means you tried to get money for something you haven't done because you worded it that way. It won't hold up in court unless you can prove you did 30 days of work he didn't pay for...and according to your description, you didn't, he just canceled without proper notice.

    Edit: If you are nice about it, you may be able to prorate him for the 7 days of May...but I still wouldn't bank on that.
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  • Profile picture of the author DaniMc
    I wont use a contract unless it were a job over 10k. Even on an annual value over 10k, I split things up into smaller purchases. Like a monthly payment or paying for certain milestones of the project.

    Payment first - then work. If the end of one milestone arrives, before the next begins, a payment is due. Spelling out terms via emails back and forth and written clearly in the invoices is enough for my comfort. If they pay the invoice, they obviously agreed to the terms.

    It sucks you are having this experience. I've been there before and probably will again. Just wipe your feet of this guy and move on.
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  • Profile picture of the author AndrewCavanagh
    Originally Posted by ADukes81 View Post

    So I ask, what is the point of having a signed contract?
    It is useful to have in writing what service you will deliver
    and when and what is required from your client, how they
    will pay and when.

    Most of what people think are contracts are actually just written
    agreements...a contract is a different legal entity.

    In any case it doesn't really matter.

    You're probably not going to pursue civil action.


    Here's the only secret to doing business you ever really
    need to know.

    Do business with people who are honest and act with integrity and
    fairness yourself.

    There are people who will try to take advantage of you and try to
    rip you off.

    Cut ties with them as quickly as you can...ideally never do business
    with them in the first place (with these people there are red flags
    everywhere).

    The more honest you are the more easily you'll identify those who
    aren't.

    As my friend and business partner Jim Cockrum says "the good guys
    know who the good guys are."

    Kindest regards,
    Andrew Cavanagh
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    • Profile picture of the author AndrewCavanagh
      Originally Posted by Claude Whitacre View Post

      I never ask for partial payment for work I've done, because they are always paying me in advance.
      Originally Posted by Mwind076 View Post

      We don't do any work without being paid first.

      Even if it's a recurring fee/monthly fee/payment plan, get paid before you do any work, and you won't have any issues.
      Originally Posted by Dan McCoy View Post

      Payment first - then work.

      Three different, very experienced marketers all saying pretty much the
      same thing.

      Get paid BEFORE you do any work.

      My guideline would be charge enough upfront so that if you never get
      paid another cent you're still happy doing the work.

      In many cases that can be better than getting the full fee upfront
      because if you're charging 50% of your total fee upfront and you're
      happy doing the entire job for that 50% fee then you're effectively
      getting double what you're happy doing the work for when they
      pay the other 50% on completion.

      In any case getting paid before you do work is the real key to having
      a sane business.

      Kindest regards,
      Andrew Cavanagh
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  • Profile picture of the author Igor Fridrihs
    Hey,

    Using contract is a must. First of all for your safety. Unhappy customers can harm you behind of your back and you can find it when the process is irreversible.
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  • Profile picture of the author fandbworld
    Update from yesterday when I posted that someone owed me 500. Thread inspired me to come up with something to get the payment.

    All I said was that I could send a ton of spam at their email, thousands a day if they did not pay. I got a message immediately apologizing and payment sent lol

    So possibly could use scare tactics with some clients just to get them to make the payment. Probably isn't the best way to go about it but it worked for me this time
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    • Profile picture of the author iAmNameLess
      Originally Posted by fandbworld View Post

      All I said was that I could send a ton of spam at their email, thousands a day if they did not pay. I got a message immediately apologizing and payment sent lol

      So possibly could use scare tactics with some clients just to get them to make the payment. Probably isn't the best way to go about it but it worked for me this time
      That's stupid...
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    • Profile picture of the author atrbiz
      Originally Posted by fandbworld View Post

      Update from yesterday when I posted that someone owed me 500. Thread inspired me to come up with something to get the payment.

      All I said was that I could send a ton of spam at their email, thousands a day if they did not pay. I got a message immediately apologizing and payment sent lol

      So possibly could use scare tactics with some clients just to get them to make the payment. Probably isn't the best way to go about it but it worked for me this time
      Making a statement like that to your client isn't really smart..
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      • Profile picture of the author fandbworld
        Originally Posted by atrbiz View Post

        Making a statement like that to your client isn't really smart..
        Not my client anymore, just figured I would try it and it worked. Don't even know how to do spam emails like that.
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        • Profile picture of the author Scott Stevens
          Send the boys round. Mess him up.

          No, seriously, it would be great if you could get his competitors ranking above him, and cripple him that way. But I guess, how much is our time really worth? Move on.

          His loss.
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    • Profile picture of the author Aaron Doud
      Originally Posted by fandbworld View Post

      Update from yesterday when I posted that someone owed me 500. Thread inspired me to come up with something to get the payment.

      All I said was that I could send a ton of spam at their email, thousands a day if they did not pay. I got a message immediately apologizing and payment sent lol

      So possibly could use scare tactics with some clients just to get them to make the payment. Probably isn't the best way to go about it but it worked for me this time
      If you think spam is scary you wouldn't want to deal with some of the people I know. Say that and you may end up in the hospital. Some people don't take threats well and will show you what real threats look like.
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  • Profile picture of the author curationsoft
    contract and partial payment is very important when you are dealing with clients. if you have the contract then i must say that you have the right to received what is due to you.
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  • Profile picture of the author thattaway
    The point of having a signed contract is to have a clear understanding of each person's expectations and obligations. Unfortunately, a signed contract with an attorney is often pointless.

    I know I am generalizing, but just ask a few court reporters how hard it is to get paid after they've done their jobs. I interned for a prominent attorney when I was in law school. It ended up costing me $4500... long story. It is one of the reasons that I decided not to practice law.

    Don't let this former client rent space in your head. It's just not worth it. Think about it. Attorneys fight with people for a living, and everything is a contest. They have to WIN!

    You did your job and ended up with a deadbeat client. I hope it never happens to you again. Every time I consider targeting attorneys as a niche, I think of my expensive experience. Now I will also think of your story, and come to my senses!

    Thanks for sharing your experience. Move on, and go help people who will value you, and reward you accordingly.
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  • Profile picture of the author mjbmedia
    Why not approach him and ask him to draw up a water tight contract for you to cover all eventualities, included ones like his, if nothing else it should calm any rough waters, make you both smile and he may think 'you know what, this Adam guy is too cool for me to screw around' .
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  • Profile picture of the author bsummers
    When doing work for someone, it always pays to be paid upfront. When prospects complain, tell them that you need it to cover the expenses you'll incur in performing the job, plus compensation for the labor you have given. Having it drawn up in a contract pretty much gives them a sense of control over you, but it also works the other way around. If they pay you, and you do your job as the contract stipulated, well and good. If you did a shabby job, then sure, they can sue you for a money back. If they don't pay you, then you can simply walk away from the project. It's written in the contract, anyway, so there is no real loss at all.
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  • Profile picture of the author ex9to5guy
    contracts for seo are pretty worthless. Of course you want to have one just to look professional but chances are if the client decides that they arent goning pay you, there is not much you can do. Unless of course the money owed is so great you decide to take them to court.
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  • Profile picture of the author Rearden
    Lesson of the Week: Always get paid up front before work starts.

    I did this in my personal training business with no problem.

    Very rarely did I have to chase clients down for money.
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