We know that the creative side of entrepreneurship is what draws most of us in. For the business and legal side, Christina Scalera is our go-to girl! She will be leading “Creating A Great Client Contract” in our Creative Business Crash Course and we are so excited. After spending some time doing legal work for a corporation and realizing that dressing up in pant suits was not her cup of tea, Christina has since started a business and committed herself to helping creatives with her wealth of legal information. Today, we are introducing you to Christina as she shares 5 common contract myths!
5 COMMON CONTRACT MYTHS
1. You need legalese to have a valid contract.
Legalese is a big red flag for me these days as an attorney. There are some words that are good ‘ole standbys (such as the word “herein,” which simply indicates you can find whatever word or concept is referenced anywhere in the document), but there are others that persist needlessly. “Duly executed,” “henceforth corresponding,” and even latin phrases are strongly discouraged by top law school contract drafting programs these days because guess what? Even lawyers don’t want to de-code that junk. Using plain English in your contracts is not only trendy, it’s also smart because the ultimate goal of the contract is to clearly lay out the parties’ agreement.
But don’t believe me – even members of the Supreme Court of the United States have a disdain for legalese.
2 . One word can change the entire meaning of a contract.
It’s pretty rare that this happens. Is it possible? Absolutely. But in my opinion, this is more or less a scare tactic to denigrate your ability to decipher your contract for yourself (aka “you need a lawyer! Hire me!”) Reading your contract carefully, and having other business owners or friends/family give it a once-over can be incredibly valuable if hiring an attorney to review it is too expensive for you right now.
One tip – highlight any phrases or words you don’t know in one color, and use another color to highlight anything you read that you get that icky-stomach-drop feeling.
3. Unless there’s a formal contract, you don’t have a real agreement.
Contracts can be formed in three ways- orally, written/typed or by taking action. For example, if you tell someone you’d really like them to start painting your house and they begin while you’re not home, it’s likely you’d have to pay them for their time, if not for the whole job, since they accepted your offer (“Will you paint my house?”) with an affirmative action, aka, beginning to paint in good faith that you actually wanted their services.
Similarly, if you have an oral agreement with someone to start planning a wedding, sewing a custom dress, shooting a portrait session or styling a shoot, and you actually begin work on that, the person or company contracting you probably owes you money for your time and effort thus far, since you started working for them if you gave them the oral go-ahead.
I think it’s obvious to say none of this is preferable to a written agreement, but it is indeed a myth that contracts are only formed with a formal document + signature.
4. The terms in your contract are always what you have to follow.
Regardless of what your contract says, if you and the other party behave differently for an extended period of time, legally speaking, you have accepted the new behavior as part of the agreement or formed a new agreement regarding your actions. For example, let’s say you sign a lease for your office space. In the contract it states you must pay by the first every month, but for the last six months you’ve paid on the 15th and your landlord never said a peep. It’s likely a court would find the landlord has accepted this new term regarding when the lease payments are due.
5. Contracts are only valid if they’re signed in person.
Almost every state is moving towards electronic filing and discovery. That may sound like a bunch of gobbledy-gook to you, but to lawyers, it signals the industry’s acceptance of electronic documents and signatures. As a general rule of thumb, the only documents that still must be signed in person to be valid are documents where they are incredibly permanent, such as wills and trusts or property deeds. For your client contracts, using a service that lets you sign electronically makes it incredibly painless for both you, alleviates the back and forth, overcomes tech trauma, and shows your clients you’re organized + efficient. I use HoneyBook for my client contracts and workflow.
Questions? Comments? Get in touch with Christina or say hello below!
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