The Devil Is in the Details
By Nina Kaufman, Esq.I hear a lot of complaints from business owners about not getting paid . . . cash flow is an issue . . . and they’re concerned about meeting their own obligations. But when we start to explore how they can protect themselves from slow payers, I find that they’ve often left themselves exposed. Here are just a few areas where a little protection can go a long way:
- Charging interest. If a customer pays you late, you’re losing not just the fee (or the price), but also the time value of having the money in your pocket. Charging interest or late fees on late invoices can supplement that lost time value.
- Attorney fees. One of the big impediments to bringing a lawsuit is the cost of hiring an attorney to handle the matter. If the other side had to pay your attorney fees (assuming you were in the right, of course), you’d then have a huge bargaining chip to resolve the matter sooner.
- Venue. If you do business with out-of-state clients, the last thing you want is to have to schlep across the country to bring a lawsuit against them. You can agree in advance to bring disputes in the courts to your home turf. That can also add valuable leverage.
These are just a smattering of the terms you can put in your arrangements. But you need to have them in writing–which is why written contracts are so important. You often see them in sections of contracts called “boilerplate” or “general” or “miscellaneous.” In fact, why do contracts have to be so long? How does all this “fine print” help–or hurt–you? To learn more, get your copy of our handy pair of booklets, Common Contract Pitfalls & Guide to Fine Print!
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