Understanding Contracts

Contracts and agreements have been a part of the sales process since time began. Often when we sell something, we also make an agreement to provide a certain product or service in a special way. We might agree to provide a certain level of service, customized paperwork or individualized patient training that is decided upon prior to the agreement's being finalized. While it may be easy to sell a product, it is way more complicated and painstaking to create an acceptable and workable contract.

Remember, not all agreements are set in writing, nor are they formalized with signatures or with the aid of an attorney (although I would recommend one). They are often sealed by only a handshake, a nod of the head or a few short sentences that refer to one person or company promising something to another.

But if we are going to become expert salespeople, then we must understand the basic concepts of a contract or agreement, regardless of the form in which it is created or delivered. Following is a snapshot of several contract elements you and your sales staff should be aware of as you consider contract options with your clients or referral sources.

• Who will write the contract?

  Experience has taught me that the person who writes the contract is often the one takes the lead in protecting his own interests. Make all attempts to write the contract as a team, and ensure that each element of the contract is discussed before it reaches the final draft.

• Are you looking at a boilerplate contract?

  If you are looking at a standard contract used in previous negotiations, be careful. Even though you or the referral source may have used this contact successfully before, new times and a new age may require a total redo of the key elements.

  For example, your staffing might be different or the territory for providing service may have expanded. You now could be buying products from different manufacturers than those used in a previous contract. Product pricing might have changed and so might your fixed business expenses. While you may want to use the framework from a former contract, never believe that it will be of value more than once.

• What services and products are included in the contract?