What startups need to know about contracts

IT Contract Templates are a great option for startup businesses

Founding a startup is a heady time, there can seem to be a huge number of things which all have to be taken care of at once, and at the same time there is so much which is exciting and new. And of course, there are plenty of agreements and contracts startups will need in their first few months of life.

Startups will need agreements with suppliers, with distributors, and with customers. As well as this, they will need to make sure that the type of agreement they have is the correct one for their needs.

Where there is a professional relationship there needs to be an agreement. And while many startups feel like they can get away with agreements settled over handshakes or written on coffee-stained napkins, they really do need to have proper contracts with provisions for if things go wrong.

At the polar opposite of the contract on a coffee napkin is the idea to go and create the perfect contract which can be used at all times in all circumstances – the Rolls Royce of contracts which takes hours to complete and costs a huge amount in both legal advice and wasted time.

Rather than creating such a contract it’s much better to cover the main areas which can cause problems then add on to the template as the business grows.

The main thing a contract needs to do for a startup is limit risk. Spell out:

  • What service will be provided
  • What is the cost and how will it be paid
  • Who owns the intellectual property
  • Limitations of liability
  • Term of the contract
  • Provisions for terminating the contract early

A startup could go along to a law firm and be told that the work they need for contracts will cost them $10,000 – but they don’t need to. The contract can be put together to last in the short term, and can be changed in the long term.

Trying to crystal ball gaze when it comes to contracts is dangerous for young companies – it’s impossible to know what the technology is going to be in a few years, so contracts must have provisions to change and grow.

ITC Contract Templates are ideal for startup companies. They contain everything the startup needs for a basic contract, with easy-to-add clauses for more specialised agreements. They provide extremely good value and don’t have the seams which constrain other contracts – these agreements can change and grow as both the new company changes, and the tech they’re working with does too.

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