# How frame a contract

You're typically not obligated to establish the contract (e.g., the right to refuse service) but *are* typically required to perform an existing contract.

- Be *very* mindful of specific [discrimination-based](people-discrimination.md) matters (e.g., racial, [sexual orientation](gender.md), [religion](religion.md)) that create grounds for litigation.
- If you intend to discriminate with those domains, *always* have an ["actual" condition](people-lying.md) that you're discriminating against.
- If you're an agent on behalf of another organization, you're only allowed to amend, cancel or interpret the contract, but cannot be a party stated in that contract.

Always, *always* use [a contract](people-contracts.md), written at least, and preferably notarized.

- Even if it's a quick task or a project for a friend, a contract protects all parties.
- While it may seem obsessive or distrustful, you're protecting yourself against the worst parts of a dramatic minority of acquaintances and interactions (similar to [security cameras](safety-security.md)).

Always send a proposal in writing that outlines the scope of the project:

1. What you will do.
2. Any clear deadlines about when you'll do it.
3. Any clear things you will *not* do.
4. The rate you'll charge for any tasks outside the scope of what you're contracted to do.
5. A formalized contract they're required to sign.

If you're patient and meticulous, you can write a viable contract yourself:

1. Give a summation at the top that indicates the "spirit" of the document, which will prevent a perversion of [justice](morality-justice.md) for its misuse.
2. Only use words with one specific meaning, and be *very* certain you understand that meaning, and focus on simple words or use more words to clarify *everything*.
3. State things in a way that it's *completely* impossible to misunderstand what you mean.
4. If there's a rule defined through an example, make sure you're stating that it's an example (or it may be regarded as a rule itself).
5. Read it over three times:
   - Once for grammar
   - Second for broad scope (i.e., "Does this incorporate everything?")
   - Third for narrow scope (i.e., "How could someone honor this while also hurting me?")

If your contract isn't a standard form, make sure it's well-worded and reviewed by a lawyer, since the burden falls on you to get it correct ("contra proferentem").

- Using language that mandates arbitration may create a ruling strictly in your favor, but mediation *guarantees* more long-term results, including people paying what they owe and renegotiation of more mutually beneficial contracts.
- If you have them use *any* private information, include a nondisclosure agreement.
- Make sure everyone relevant signs *all* the relevant lines of the document.

Whatever price that's been agreed-upon is non-negotiable.

- Do research beforehand about how much others charge for the service you're providing.
- When proposing your rate for a service, either increase your rate for a service with the expectation they'll push back, or make the rate reasonable and non-negotiable.

Be careful with things outside the scope of your experience:

- If you're advising, make sure you're disclaiming that your statements are *not* advice.
- If you're performing, take the time to educate yourself on the industry's idiosyncrasies and take *extra* time on the tasks themselves.
- Fully clarify to them what you *do* and *don't* have authority and experience with.
- When you're unsure, walk away and admit defeat, or try again months or years later (assuming you're still obligated to perform).

If you expect continued business, send a master services agreement, along with a new scope of work for each new project.

- Keep track of anything relevant to the engagement, both in [paperwork](legal-safety.md) and in [accounting](money-accounting.md).

Allow yourself lots of extra time to do everything correctly.

- Most errors come through hastiness.
- You *can* work faster and make more money, but you're more likely to fall into a major legal pitfall later.

Always ask 2 questions, *constantly*:

1. Did they get the message?
2. Can I prove they got the message?

From the beginning, manage expectations with others.

- Articulate what you will and will *not* do, and make sure they thoroughly [understand](understanding.md) it.
  - Avoid using *any* jargon that may confuse them or make the situation vague.
  - Don't use vague statements (e.g., "we always give good service").
  - If possible, communicate *anything* that uses [numbers](math.md) (e.g., effective dates, dollar amounts, limits).
- Record absolutely *everything* you agree with anyone, preferably in writing.
- If anything changes, notify everyone involved immediately and record that in writing as well.
- Use standardized checklists to track what you did and didn't promise and what officially happened.

Document *everything* that might be potentially pertinent.

- Track all key information:
  - Clear articulation of what happened.
  - What everyone agreed to verbally.
  - *Any* limits, clarifications, exceptions, or cautions to the original agreement.
  - Date and time of the notes/discussion.
  - Signed and initialed by everyone involved.
- Pay close attention to special cases:
  - If they declined *anything*, clarify exactly what you offered, and they declined, any potential risks you've communicated that they've heard, and other alternatives you've offered, and they've also declined.
  - Get a signed waiver for any risks they're assuming themselves, or for any declinations or exceptions to the standard agreement.
  - If *you're* declining an agreement, clearly document exactly *why* you are and what can still be arranged.
- Do it as soon as possible (i.e., minutes later), since you'll likely forget key details by the next day.
- It doesn't have to be typed, but it must be legible, and preferably stored in a [well-organized](organization.md) location (with [backups](computers-distsys.md)).
- The validity of the documentation depends heavily on the consistency of your records:
  1. Freehand notes on blank paper (e.g., sticky notes, notepads) give complete freedom for vagueness when recording it, and it's difficult to prove anything was discussed.
  2. Standardized forms (e.g., checklists, call surveys) are more consistent, but still difficult to prove.
  3. Recording an issue in writing to someone else and saving a copy (e.g., sales proposals, binders) indicates the information was communicated.
  4. A signed disclaimer or acknowledgment by the other party indicates the information was understood.
- Electronic documents are excellent, but stay consistent with [organizing them](organization.md):
  - If you can't find the document when you need it, you may as well not bother having it.
  - For digital signatures, make sure they've consented to electronic-only document delivery.
  - Either import the information from a cell phone, or have them call an office phone number with a recorded line.
    - Store voicemails electronically.
    - Text messages require a date/time and actual contact information (i.e., phone # for SMS or phone/email for MMS).
  - Email is formal written communication, so do *not* speak badly about others or admit to an error.
    - Treat [OCR/ICR scans](computers-ocr.md) and faxes like email attachments.
  - Save any files (e.g., PDFs) as formal documentation.
  - Take screenshots of anything that may be relevant.

If you or they are at all unsure, make the record more official.

- If the contract has significant conditions, have it notarized.
- If you're unsure about the owner of a title, get it bonded or get title insurance.
- If they expect any relevant [insurance](money-insurance.md), make sure you get a certificate of insurance from your agent.

If you're hiring anyone, always include a non-compete, non-solicitation, and nondisclosure agreement for the duration of their employment.

- Don't extend the non-compete term beyond their employment with you, since it's [unethical](morality.md) and sometimes illegal.
- If you're *really* concerned about some form of [intellectual property](legal-ip.md), make an ironclad nondisclosure agreement instead.

Frame the language of the contracts with the other person's interests in mind, preferably *more* inclined toward their interests than your own.

- Only emphasize the specific interests which work the most in your favor, and give a wide license to terminate the contract.
  - Finding a new service provider is *much* less trouble than forcing a current service provider to perform, especially if the contract has clearly stated their fees for cancellation.
- You can often win out in the short term with a more constraining contract on the other party, but it generates tension that could lead to a legal battle later.
- Even if you're using subtle tricks to hide what you're doing, you'll damage your long-term reputation when people eventually find out.

Do *not* include predatory clauses that could force noncompliance or get you in legal trouble.

- Unless you're paying them a *lot* of money, a no moonlighting policy is unethical.
- Reducing features or the scope of the contract is sometimes legally defined as a cancellation of service.

Generally, avoid lifetime contracts unless *both* sides are providing continued lifetime investments:

- Lifetime contracts for a one-time payment or limited obligation are always an undue burden on one side, meaning the quality of their performance will suffer over that lifetime or the entity may become unable to keep performing.
- The only time a lifetime contract is worth it is when that lifetime is significantly shorter (e.g., terminal cancer) or when there's a secondary use for the consideration (e.g., [investing](money-investing.md) the proceeds into a continuous source of income).
- Instead, make a significant long-term contract with a fixed number of years (e.g., 5 years, 20 years).