As a business operator, and yes this includes artists, dressmakers, couturiers and tailors, we all use contracts, everyone should be aware of and know what a legally binding contract is.
Very few creative types like to talk about them, and like even less to think about them until something goes wrong. The purpose of designing your own contract for your business is not only to secure work and lay out the terms of getting paid, but also planning what would happen if [or when] something doesn’t go to plan.
So, exactly what is a contract? More specifically what are the elements of a legally binding contract. We kind of make and fulfill contracts everyday without realizing it, like agreeing to meet up with friends for lunch and you promise to pay for desserts ‘if’ you all go the restaurant of your choice this time. This is a contract if your friends mutually agree to it – by phone, email or text message. What?!
If one of your friends couldn’t make it to lunch, not really a problem for you, but likely hugely disappointing if no one turned up but you. But what if everyone turned up but you? I’m guessing hard feelings would be one major downside, but you also did break an agreement or rather you breached a contract. Your friends could take you to task over it (in court), especially if they could prove your offer, that you broke your promise and they were put out of pocket as a result! Say what?!
In all seriousness though, that probably wouldn’t happen, but it could be enforceable in a court of Law. [Very briefly, Contract law covers contracts, etc. as differentiated from Criminal Law: conduct perceived as threatening, harmful, or otherwise endangering to the property, health, safety, and moral welfare of people. But a breach of contract could certainly overlap with breaking a criminal law]. I’m not a lawyer, so I don’t have all the details, but I do know this from my college business law class.
A legally binding contract has 3 crucial elements (plus 2 provisions).
- An offer. You offer your couture service or offer your creation for sale [see point 5] personally, online, by email, however you put it out there.
- Acceptance. Someone accepts your offer [see point 4], personally, online, by email, however they let you know.
- Consideration. There is an exchange of something of value: cash, services, goods or specifically to withhold an exchange of cash, service, or goods.
- You must be of legal age of consent, and/or of sound mind and body or fully competent to participate.
- And the object must be legal. If what you are selling or buying is illegal, then the contract is not valid or void. The object is not misrepresented.
Both written and verbal agreements are legal. Verbal agreements are legal contracts even though they were not memorialized in a writing. Assuming the contract is valid, the verbal agreement between two parties is binding although it is very hard to prove if it were in dispute. Beware, even emails and text messaging can constitute a legally binding agreement!
The body of a contract also should include essentials like date(s), the names of the signatories, the details, and the ‘what ifs?’ What if something were to go sideways, or someone didn’t fulfill their end of the agreement, such as non-performance or interference with the other party’s performance. This then would become a ‘breach of contract’ or a broken contract.
It’s prudent to identify what happens if your client doesn’t turn up for an appointed fitting, or doesn’t have the money to pay you on time. Or what if your client is unhappy with your work during the process, how can you prevent that from becoming an unsolvable problem. If everyone knows in advance, what the possible problems and consequences are, commonly known to happen from time to time, then all parties do much better in preventing them from arising in the first place.
Informing all parties involved about what is expected of them and what they can expect from you prevents heartache and hardship. Try to avoid being overly wordy, but be clear. No one wants or expects things to go wrong doing business, but it occasionally happens. No one wants a surprise ending, everyone wants what they expected.
Every transaction can be a learning experience. You’ll soon figure out what works best for you, and especially what doesn’t. The path to success really does look like this: