Contract

What is a contract?

A contract is a formal agreement that creates legal obligations. For contractors and service providers, contracts define what work you'll do, how much you'll be paid, when payment is due, and what happens if something goes wrong. A good contract protects both you and your client by setting clear expectations upfront.

Key contract elements

Business contracts typically include:

• Scope of work — Exactly what you will (and won't) do
• Price and payment terms — How much and when you'll be paid
• Timeline — Start date, milestones, completion date
• Change order process — How to handle scope changes
• Termination clause — How either party can end the agreement
• Liability and warranties — Who's responsible for what

Why contracts matter

Contracts prevent misunderstandings and give you legal recourse if clients don't pay or disputes arise. Even for small jobs, a simple written agreement is better than a handshake. The time to sort out expectations is before work begins, not after problems develop.