3 Easy Fixes to Double Check Before You Send or Sign a Contract – Transcript

[Intro Music] This is Office Talk with Annette Stepanian. 

Annette:

Hey guys! Annette here. And we’re back with another episode. Thank you so much as always for being here. Now before we dive into this week’s topic, I want to bring you guys up to speed on a bunch of things that are happening, and I wanted to make sure you knew about it, so if you’re interested, you wouldn’t miss out.

Next month, so June 28 of 2017. I’m co hosting a master class with the folks over at Aisle Planner. We’re putting together a presentation for folks in the events and wedding industry titled: Is my Wedding Business Legally Protected?” Basically, what this is, is going to be a 60 minute presentation online. You’re going to have an opportunity to submit your questions to me in advance, and I will address them during the presentation as well as present some frequently asked questions about the law and your business. 

Now, if you’re interested in this and are thinking but what if I can’t make the date live? Don’t worry, we are going to record it and send out a recording to you that will be available for about two weeks after the presentation goes live. Now if you’re interested in want to sign up for this, you can head on over to annettestepanian.com/masterclass. Or you can just go to my website and you’ll find links to it on there. And I encourage you to sign up before June 9, because that’s the day that the early bird special of $34 ends, and then the price jumps to $44. I really hope you guys will check it out. Because it’s a really great opportunity for us to connect one on one and learn a little bit more about law and your business. I promise I’ll make it fun. 

Now the next thing I want to talk about is something I hear from so many of you guys. “It’s oh my gosh, Annette, why is the law so confusing. I wish there was a step by step roadmap that I could follow that someone could tell me what to do. And I would do it.” I hear you girl. I felt the same exact way when I started my first business, which was a jewelry design company. I wanted to do everything the right way and the legal way when I first started, but I found that the information was just all over the place. It was so confusing. And I was like, dude, I’m a lawyer. Why is it so complicated for me? What you may not know is that I already have this resource for you. And it’s called Your Legal BFF. But I decided to take it down. And I decided to completely rework the program rework the training to make it more accessible for you guys, the doors to that right now are closed, but they’re going to be opening up in a few weeks. And if you’re interested, if you want to take your education and your knowledge a little further and have a comprehensive guide that will teach you the essentials, then I encourage you to sign up for the waiting list, you can find that over on my website at annettestepanian.com/wait. So that’s annettestepanian.com/wait, I don’t know why I find that so funny. And as a member of the waiting list, you’re going to get a little extra special something for me if you decide to purchase the program. 

Okay, so now that the announcements are out of the way, let’s dive into today’s topic. Which is kind of simple, but it’s one of those things that we all tend to overlook, because we’re all so busy doing a million things. Now what I want to talk about is one of my things that I love to do when I am writing contracts or revising contracts. And that is to look for these minor formatting errors that can really mess up the interpretation of a contract. 

So what I want you to do is pull out your contract while you’re listening to this episode. Go on. I’ll wait. And if you don’t have a contract, remember, I do offer these over on my website. So you can always find contract templates over there for your business. But I want you to pull out your contracts. Maybe it’s one that you use in your new business, or it’s one that you’ve received, and I’ve been asked to sign. And there are a few formatting things that I want you to look out for. 

Now, the first thing I want you to look out for is are the parties to the contract correctly identified? Okay, so take a look. If it says, you know, party A and party B enter into this contract, I want you to look at both in that opening paragraph of the contract as well as in the signature lines and make sure that they have identified the correct party. So what does that mean? 

So if a party is a sole proprietorship or an individual, you can identify the party to that contract as the name of that sole proprietorship. So let’s say it’s Jane Doe, you can put down Jane Doe. 

So let’s say Jane Doe is operating her business under the fictitious business name Premier Weddings and Events. You’re going to identify that in the contract you can put her down is Jane Doe DBA Premier Weddings and Events. 

Now if either of the parties is let’s say, an LLC or a corporation or a partnership, where they’re, you know, basically it’s an entity that is separate and apart from the individual itself. For purposes of our example, let’s say we are an LLC and its Premier Weddings and Events, LLC. So in that case is important that you identify the party in the contract as Premier Weddings and Events, LLC, and not as the individual. So in our prior example, that would have been Jane Doe. The reason why that’s important is because whoever enters into the contract is then potentially liable under the contract. 

So if Jane Doe enters into the contract, then Jane Doe is personally liable under the contract. However, if Premier Weddings and Events LLC enters into the contract, then it’s the LLC that is only liable under the contract. 

And what happens is sometimes, you know, we are one-woman or one-man shops, and let’s say you are Jane Doe, and you have formed this Premier Weddings and Events, LLC, you know, it doesn’t feel like we’re managing this huge operation. So we forget that: “Wait a minute, there is this other entity out there, that is actually the business.” And so we might make a mistake and accidentally put our individual names or Jane Doe’s name in the contract when it should have been Premier Weddings and Events, LLC. The reason why this is important is because of those protections against personal liability that are afforded when you form an LLC, and is the reason why so many people want to become LLCs, that’s not going to apply. BBecause you have entered in the contract not as the LLC, but as the individual. 

I’m hoping this all makes sense. So the point I’m trying to make here is that when you are entering into a contract, make sure that you are correctly identifying the parties to the contract. So both you as the business owner, as well as the client. So always just ask, always confirm should the LLC or the corporation or the partnership entering into the contract, or the individual? 

Now then people then usually will ask me, well, then who signs the contract? So let’s say you are an LLC, you’re entering into the contract as an LLC, whose name do you put down in the signature line? Well, anybody who has authority to sign on behalf of the LLC, so that’s usually going to be you as the business owner. So in our example, Jane Doe owns Premier Weddings and Events, LLC, so she can sign on behalf of the LLC. So in the signature line, you could put Jane Doe comma, owner of Premier Weddings and Events LLC.

Another thing that kind of drives me bonkers is the way days are defined or calculated in contracts. Now, this is just my preference. What I like to do is anytime that there is a clause in your contract that something needs to be done in a certain number of days. So let’s say you have to give 30 days written notice to the other party of your intention to terminate. I like defining what days are. And I like to pick between either business days or calendar days. Now, business days mean that you count Monday through Friday, and calendar days means you count Monday through Sunday. So it takes a lot longer for something to happen when it’s business days versus calendar days. Okay, so you might have to think that went through a little bit. It takes us like, kind of like a mind tease. But what it basically means is, since you’re only counting five days, when you’re using business days versus seven days, things take a lot longer when it’s under business days now. It’s just for me, it’s my personal preference. I really like just whenever you see days, pick one use it and move on. 

So another common mistake that kind of drives me bonkers, and also has the impact of affecting the way in which your contract is interpreted are these formatting mistakes. So a few things. So first of all, you don’t have page numbers, that just drives me nuts, always have page numbers. The attachments that you are referencing within the body of the contract are not attached. That happens all the time. So in the body of the contract, someone will say see attachment B for yada, yada, yada, and then you go there is no attachment B. No, I don’t like that. Because this is not a complete contract. In that sense. I don’t know what attachment b is, I don’t know what you’re referencing. So always make sure that any attachments are included as part of the full contract. 

Another kind of formatting tip that drives me bonkers is when the paragraph numbers are all thrown off. So here’s the scenario. You are negotiating a contract, you might be going back and forth with the other party. You guys are deleting paragraphs, you’re adding paragraphs, you’re using track changes. And then you finally agree to something you accept it. But then what happens is all the paragraph numbers are thrown off. So it might go paragraph 1,2,3. You don’t have a paragraph for you skip to five. Which okay, that’s pretty easy to fix. But another thing that happens when you make these kinds of edits is that let’s say in paragraph five, you’re referencing paragraph six, but then all of a sudden Paragraph six got edited and it’s no longer the same paragraph six that paragraph five was referencing, it kind of causes a mess. 

So I love it when you just go through and you check for these common formatting errors. You just double check, triple check that any references to other paragraphs that are made within the contract, any references to attachments like we discussed made within the contract. All of those things are correct. All of the paragraph numbers are there, all of the page numbers are there. This is I know seems so trivial, but trust me when I say that it can affect the way in which your contract is interpreted. Okay, so please, please double check your contracts for all of these kinds of mistakes. 

So, if you do decide to purchase one of my contracts, I include a contract review checklist, as well as provide some other additional video trainings. And in that contract review checklist, I point out some of the things that you need to be looking out for when you sign or send off your contract. So it’s a free resource that comes with the purchase of a contract template over on my website. Okay, you guys. That’s all I have for you guys today. I hope you guys are going to get to work on your contracts and get them all cleaned up and squared away so that you can get back to what you do best. 

Thank you so much for being here and I can’t wait to talk to you later.

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