In my last corporate job before I started my first business, I represented cartoonists and negotiated licensing deals for them. The first mistake I made was that I didn’t have an employment contract.

The second mistake was that I trusted my boss to have my best interests in mind. He didn’t.

For every deal I negotiated, I was supposed to earn 15% of the final price of the contract. When my boss realized how much money I was going to make on my first deal, he changed the rules and paid me a percentage of the amount the company made, not a percentage of the whole deal.

I quit shortly after that.

When friends asked me why I quit, and I explained what happened, they asked me why I didn’t have a contract. Ummm…I didn’t think I needed one? Obviously, I did.

Start with the contract

The purpose of a contract is to make sure that you and your client understand what services you’re going to provide and at what cost. Otherwise, your client’s perception of what you’ve agreed to provide may be different from yours. With a contract, no one has to second guess what the deal involves and who is responsible for what. When you create a standard contract that you can use for most clients, consider having an attorney review it.

Create a relationship built on trust

It’s important to build rapport with your clients and offer to help them as much as possible, yet you need to set limitations. When a client asks you to perform duties not included in your contract, let them know ahead of time that they’ll be billed for the extra time. No one likes surprises, especially when they involve money. Your clients will receive the services they request and you’ll be compensated for your time.

Keep the lines of communication open

Stay in touch with your client throughout the project. It’s up to you to let them know the status of the project, so make sure you know whether they want you to call them or communicate via e-mail.

Fulfill your commitment

Work to fulfill all of the terms of the contract and to meet the agreed upon deadline. Don’t assume anything. If you’re unclear about any aspect of the project, contact your client.

A contract doesn’t ensure that everything will run smoothly, but it’s a good start.

Have you ever had a problem with a contract or the lack of a contract? Please share your comments below.