I don’t want to suggest that you need to bind all your relationship with a contract, but if you like the people you are going to do business with you should have something in place to ensure there is an understanding. As my friend Lara Veltkamp of Watershed Marketing would say, “Contracts are not to control what to do in business together, they are to control what to do when you finished wanting to be in business together” (paraphrased).
You are going to write a contract or agreement to help you set boundaries for your relationship, to answer questions about what you can expect from each other and to define how to get out of the relationship if you need to. I think there should always be a way to get out of a contract. You want to decide what the costs are to get out of a contract before you go into business or work with each other, especially if you are friends. Set these boundaries when the emotions are low and positive.
Here are some places you should have a contract or letter of agreement for:
- Joint Venture
- Client agreement
There are many, many more. Say to yourself, “if things go bad will we know who is going to pay for what?” If you cannot answer this clearly and easily then you need to get something settled first. Have an expert, like a lawyer, help you with the documents you need.
This is not a legal document, nor is it legal advice, but from my experience and from what I have had to experience through my clients, it is sound. Don’t leave the guess work to a time when no one will want to spend time together.