In the Philippines, we have a habit of saying “Sige na, trust naman kita” (It’s okay, I trust you). But in the business world, relying on “trust” alone is the fastest way to lose a client, a friend, and your hard-earned money.
Whether you are a freelancer, a contractor, or a small business owner, a Contract isn’t a sign of distrust—it’s a professional “safety net.”
When doing business, your contract shouldn’t just be a wall of “legalese.” It should be a clear roadmap. Here are the five essential pillars of a solid contract, explained in plain English.
1. The “What’s Included” List (Scope of Work)
The biggest headache for any business is “Scope Creep”—when a client asks for “just one more thing” until you’re doing double the work for the same price.
- Keep it Simple: Be incredibly specific. If you’re hired to paint a house, list exactly which rooms. If you’re building a website, list how many pages.
- The “Not Included” Section: It is often helpful to list what you won’t do. For example: “This price includes the design of the logo but does not include revisions and printing costs.” This prevents awkward “I thought that was included” conversations later.
2. Clear Payment Rules
Talking about money can feel uncomfortable, but being vague about it is worse. If your payment terms are vague, your cash flow will be, too.
- The Schedule: Don’t just list the total price. State when you get paid. Is it 50% upfront? Is it after every milestone?
- Late Fees: Mention a small penalty for late payments. This isn’t about being mean; it’s about ensuring your business stays afloat and your time is respected.
3. Deadlines and “Who Does What”
A project usually stalls because one side is waiting for the other. A good contract keeps the engine running.
- The Two-Way Street: List your deadlines, but also list the client’s deadlines. For example, “I will deliver the draft 5 days after the client sends the photos.”
- The “Wait” Clause: If the project gets delayed because the client didn’t respond for a month, your contract should allow you to adjust the timeline or even charge a “restart fee.” This puts the ball in their court and protects your reputation.
4. How We Will Talk (Communication)
Misunderstandings often happen because one person uses Viber, another uses Email, and a third uses Facebook Messenger.
- The Paper Trail: State that any official changes to the project must be made in writing (like an email). This protects you if a client claims they told you to change something during a casual phone call that you don’t remember.
- Response Times: You can even set boundaries, like: “Emails will be answered during business hours,” so you aren’t expected to be “on-call” 24/7.
5. The “What If We Fight?” Plan (Dispute Resolution)
No one enters a partnership expecting to argue, but it happens. If you don’t have a plan, you might end up in court for years, spending more on lawyers than the contract was worth.
- Talk First: Your contract should say that if there’s a problem, both sides agree to try and talk it out (Mediation) before rushing to court.
- Pick Your Ground: You can choose the city where a lawsuit would happen (usually your own city). This saves you from having to travel across the country to defend your rights.
The Bottom Line
A strong contract isn’t about being “difficult”—it’s about being a professional. It shows your clients that you take your work seriously and that you value their time as much as your own.
Is your current contract actually protecting you? Don’t wait for a dispute to find out that your paperwork is missing a vital piece. At Artillero Law, we help business owners draft clear, fair, and legally binding contracts that let you focus on what you do best.
