3 Contracts You Need to Protect your Business

legal contracts

Congratulations! 

You did it - You started your own business!

Now that you're an entrepreneur, it's time to make sure you've got your legal contract ducks in a row. But, I bet you didn't start your business so you could read about contracts all day and I know you've got at least 7,830,498 other things on your plate... so let's just cut to the chase, shall we?

1. Terms of Use and Privacy Policy

If you have a website you need these in place! And before you say, "but Jaime, does anyone actually read these?" - Hear me out! 

Your Terms of Use is a contract with the visitors to your website as to how they can interact with you, your site, and other users on your website, such as through your blog, membership portal or comments section. Specifically, your terms of you use should set set out: 

  • how visitors can use your website and it's content, 
  • If you sell anything, the terms of purchase and how you handle refund requests, and
  • how they can or can’t use your intellectual property (such as pictures and blog posts)

...and more! 

Your Privacy Policy provides information about how and why you collect, store and process any personal data obtained from visitors to your website. Even if you aren’t outright collecting personal information, your website is likely using cookies and collecting all sorts of information about how your visitors are using and interacting with your site. All super valuable information to running your business, but you need to make sure you are in line with the various laws that govern how you collect, store and use this information. 

The biggest mistake I see are privacy policies that don’t actually reflect how businesses collect and use this data. I recommend taking some time to look into the backend of your website (or ask your website designer!) to make sure you understand what and how you are collecting data.

If you have any visitors from the European Union or California, it's also important that you are compliant with the General Data Protection Regulation (GDPR) or California Consumer Privacy Act (CCPA) - but I'll leave that topic for another day!

Security is a huge issue these days and and the powers that be are cracking down on small businesses too. Don't get caught without a clear privacy policy. Plus, your visitor and customer information is sacred, so show them you take protecting it seriously. 

2. Client Services Contract

Before you start any work for that client you just landed (congrats, by the way!) make sure you are both on the same page! 

If you offer services to clients that you are getting paid for, you should have a contract that sets out the expectations for what it will be like to work together, like the services that are included in your fee, additional services you offer, timelines for delivery, payment terms, your cancellation policy, release and indemnity language (protect yourself!) and what you expect and need from your clients to do a great job.

One of the biggest mistakes I see (other than not using any contracts at all) are service agreements that are really one-sided, either in favour of the business owner or their client. Service agreements are an amazing way to set the tone for your relationship, and I recommend making this part of your client onboarding service from the start. 

3. Independent Contractor Agreement

Hiring someone to help you in your business is a huge step! Once you've decided you need help, the next decision you need to to make is whether you're hiring someone as a contractor or an employee.  If hiring a contractor, you need to be crystal clear in this distinction and set out very specifically all the ways they are not an employee, such as:

  • Their ability to hire subcontractors to help them complete the work
  • That you won't be collecting or remitting income taxes on their behalf;
  • Their ability to work for other clients, and
  • that they need to provide all the tools or equipment they need to do the work you're hiring them to do

The line between a contractor and employee is often blurred and there can be major financial repercussions if your contractor is later deemed to be an employee. Make sure you and your new hire are both on the same page before you bring them onboard!

With these three contracts in place, you'll be able to confidently grow your business, knowing your legally protected!

If you're a Canadian business owner or entrepreneur and your ready to start  your business off on the right (legal!) foot, check out all of our contract templates HERE

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