with Cam Petty
When Cam decided to start her own small business 10+ years ago, her Dad told her something never forgot and likely never will. “Cam, if you’re going to run your own business one day, you’re going to have to deal with some lawsuits.” Sadly, Cam’s father wasn’t wrong. Through growing her own business, there have been two different instances where our team has had to deal with being sued and filing our own lawsuit.
In no one do we want this information to scare you away or cause hesitation in starting your own business, not at all. We are telling you this because it’s part of the game that you might have to play one day. We did.
Instead, we wanted to share ways that we protected ourselves and the business in both instances by having certain topics covered in our rental contracts. Friends, you NEED rental contracts. If you have several services available that you provide, you should have contracts in place for each of them. In this episode of the Render Podcast, we share what we believe are the necessities of a rental contract and how having them can protect you and your company.
The beginning of any of your contracts should consist of lots of defining. Not only do you need to define a lot of different things (company name, product names, location(s), date(s), etc.) but any and all terms need to be defined with legal names. That way from the start if your contract was before an attorney or judge, there would be no questions about any content being covered in any part of the contract.
Another helpful note is to utilize the same terms that are associated across your different software and platforms. For example, we use Goodshuffle as our inventory management system in our office. It was important when writing our contracts to include the same language and terms when referring to our product that Goodshuffle uses. This gave us consistency across our platforms and aided in minimizing confusion on what was being referred to throughout our contracts.
Your terms of service need to be specified in every single contract. Because you likely will not do the same exact project ever or even at the same exact time, this portion will always be included but will need to be altered in every single contract.
In your terms of service, you should be identifying the following terms:
This is different from identifying the actual products. With that being said, you should have each rental product listed in the contract as well. Again, as it is referred to across platforms. Be sure to include the proper language associated with who is responsible for moving and transporting the product. Is it the client? Is it your team? Identifying this in the contract is the easiest way to ensure your product is being moved in a way that you are comfortable with and will minimize damages.
The great part about fees in your contract is that you get to decide exactly what you want to charge for. From the beginning to the end of the rental process, you decide when the client needs to pay, how much, how they pay, and what happens if they don’t.
Questions you should ask yourself when thinking about fees for your contract:
Once you’ve thought through those questions, be sure to check the legality of your answers, specifically with processing fees. Some states don’t allow business owners to have clients cover the cost of processing fees. Make sure you are doing whatever is legal in your state!
Processing fees are mostly associated with credit cards. If you aren’t to accept credit cards, you can also consider having clients pay via check, money order, purchase order, cash, PayPal, etc. Venmo is an additional option however you must set up a business Venmo account. You can learn more about that option by clicking here.
The last thing relating to payments we want to draw your attention to are NET payments. What this typically means is that your client wants to pay you after the event takes place and with the profit they make. Net payments will also typically be requested by your corporate clients. We vet any client requesting a net payment method in-depth before agreeing and would recommend you do as well.
After 2020, it’s usually not as much of a surprise when clients need to cancel or reschedule events. We have sadly and understandably gotten used to this. Aside from how common it can be these days, you should include clauses for your cancellation policy, and how your company will handle any requests to reschedule. It’s also still a good idea to have pandemic-friendly language in the section.
Include the timeline of your policies in your contract. How much time before the start of the event will you allow a client to cancel or reschedule? The day of, the day before, 2 weeks, a month, or more? What if you have to create or source certain products for the event? When would you have to cover costs for additional labor or supplies for the event?
Also, ask yourself, will you give a full refund after any amount of time or will you keep their deposit? Is the reason for canceling going to affect if they are able to receive a refund or part of their refund? We know there is a lot to ask yourself here and that’s why we’re talking about it! Again, you are in control of determining all of this for your business. Just whatever you decide, be sure that it is crystal clear and included in your rental contracts.
There are three more main points we want to draw your attention to when building your contract.
The first is to touch on confidentiality. This will look different likely for many companies and the services provided. The reason why we’ve included confidentiality in our contracts is that if we work with a client and give them a deal for some reason or in any capacity, we don’t necessarily want them to tell their friend who wants to work with us to negotiate the same thing. We take each project on a client-by-client basis and serve our clients to the best of our ability. Adding the confidentiality clause has saved us time (& probably some money) by ensuring our project details remain between us and the client.
The second thing we include is a limit of liability. Sometimes things happen that we don’t have much control over that effect our work. People, we live in Texas… I bet you can think of one easy thing that impacts all of our lives regularly, especially when it’s cold outside. WEATHER! Or limit of liability clause helps us out if we have a client with an event on the day the roads freeze over and we don’t want to put any of our team members at risk by having to drive on them. Granted, within the limits we include we can be more flexible with our clients in rescheduling. It all is again up to you what you want to be negotiable.
Lastly, don’t forget to talk about damages in your contracts. Address both damage fees and damage waivers you have with your client. Each of these things being included in your contract helps protect you and your business and is worth the time figuring out!
Here is a sneak peek of what this episode consists of:
[2:36] One Day You Will Be In A Lawsuit
[4:05] Women & Contracts
[8:18] Be Sure To Define Your Terms
[11:50] Different Contracts for Different Services
[14:41] There are two parts to every rental order
[18:18] Understanding Pricing & Payment Options
[26:10} Late Fees
[29:24] Confidentiality For Your Contracts
[39:01] Damages To Inventory & Liability
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Next week we will return to an episode about marketing during your busy season.
TJ White | Content Manager
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I thrive on using education to make true connections with all kinds of people. I want to point you towards better leading your teams, and guide you through all areas and stages of your business. I put a heavy emphasis on being present where your feet are, creating a community that is diverse and intentional, and growing in servant leadership through both my personal and professional life.
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