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Should you use contract prior to initiating business account of your client? Is the contract an absolute necessity?
Many small business owners have been raising these questions. They fail to find any need for contract between the supplier (or provider) and the client (or customer). They feel that bill (or invoice) alone is a cure for everything. True to some extent. Bill is the right choice marking the end of an assignment or task or order. However a bill cannot resolve some unfriendly situations like disputes.
Contract contains many terms and conditions for carrying the business between two parties involved. A contract can specify the modus operandi for the process to be followed, it may also contain the terms of payment.
A contract tries to transform subjectivity of business relationship into objectivity. Once a contract is signed by both the parties it brings around the moral responsibility to adhere to terms and conditions laid out in the contract form. Presence of signed contract facilitates ease of resolution in case of any dispute. In other words, a bill cannot be a replacement of a contract. It is contract only which stands the scrutiny of law, if the situation takes that ugly turn.
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