Top Ten IEC Contract Mistakes

I’ll never forget creating my first contract.

I was lying on my couch in Arlington, Virginia, watching Bravo’s “Million Dollar Listing” and instant-messaging on my laptop with a friend in law school. She was giving me “not-legal-advice” (if you have attorney friends you have heard this term before!) and I figured it was better than going at it alone, since I obviously had no budget for an attorney at the time. Everything seemed promising enough. What could go wrong?

As the years passed, I updated my contract regularly to reflect observations I’d had and issues that came about. By this point, I had a lot of real-life-attorney-friends and they were kind enough to pass on more “not-legal-advice” - although it wasn’t long before I finally realized that asking a litigator to review a small business contract was like a client asking me to help them apply to med school. I’m probably a better resource than a person off the street, but…. not a good-enough resource to get the job done right!

Looking back, I’m honestly REALLY lucky that I saw the light and finally engaged the services of a paid attorney before something happened. However, some of our colleagues have not been as lucky. It’s not worth taking the chance and approaching this hastily.

Here are the top ten IEC contract mistakes that I’ve either made myself or have seen other IECs make:

“Winging it” with contracts and legal advice

This is just not a good idea. It is always advised to consult with an actual attorney while setting up a business. If you can’t afford to do that, you can use LegalZoom templates or mine, which are geared specifically for IECs and are also attorney-approved.

Starting work with a client or team member before a contract is signed

Never, ever, ever do this. Do not EVER start working with someone before a contract is signed, even if you’re working pro-bono for a client. You need a clear work agreement to make sure that both sides understand the scope of your work together.

Assuming the client or employee remembers the terms of the contract

I know my contracts like the back of my hand. I used to assume that my clients did too; after all, they signed it, right? The problem is that a lot of people sign contracts without reading them and/or immediately forget the terms of the contract after signing. You have to remind people about the scope of your work together CONSTANTLY (there are very nice ways to do this). For example: “Sally, I just wanted to remind you that I don’t work on applications in the two weeks before a deadline, so we have a month to get these finished by October 15! Can we get some appointments on the calendar for you to make sure that you don’t have a problem in late October?”

Assuming the student has ever seen the contract

I didn’t understand why one of my students kept emailing me these very long lists of non-essential questions when we were pressed for time and trying hard to conserve it. Finally I point-blank asked if she was aware that I bill for remote work. She had no clue and it turned out her parents had never showed her the contract or explained the terms of it.

Writing the contract for your worst client

This is a tough one. On one hand, it’s really important to learn from past issues and incorporate them into your contract. For instance, my contract now includes a stipulation that involves my right to drop a client for any reason if I feel that I am not a good match for their needs. I thought this was obvious (considering that I would provide a refund in this type of situation), but apparently not, so it’s definitely in there now! I also have a stipulation about students that refuse to respond to emails or complete any work. However, I can’t realistically include specifics relating to every single annoying thing that clients have done over the years. If I do that, I’ll look crazy to prospective clients.

Forgetting to waive liabilities or damages

My initial contracts - for years and years - primarily described the terms of my work with clients. I never really protected myself from liabilities or damages, other than those relating to admissions decisions. We live in a very litigious society and it’s essential to protect yourself.

Failing to address issues that could arise in the future

Due to the nature of our work, it’s not unrealistic to think that the term of our relationship with a client could stretch out for several years. Even if you don’t have employees or office space now, you might in the future. Make sure you plan ahead.

Providing paper contracts instead of electronic ones

I assume that everyone is sending electronic contracts these days, but if you’re not, you’re wasting a crazy amount of time. Nobody wants to print out and sign and scan a contract anymore. I used 17hats for years and have just transitioned to PandaDoc, which I’m loving! There are plenty of different companies that offer these services, so just pick one!

Forgetting which client has signed which contract

If you do make changes frequently, make sure that you know who has signed which contract! This is important, because two years from now you might forget whether you gave someone version #17 or version #18 if you’re already on version #21. Make sure you verify the terms of the contract - whether it’s with a team member or a client - before “reminding” someone about what it says.

Using a contract template that is too specific

I used to have about 12 separate contracts, because I had four different packages and was signing contracts for students across multiple class years at any given time. No more! Now, I submit a proposal that outlines my work with the client and have ONE contract template that accompanies each proposal. All I have to modify is the student’s class year in two different places. That’s it. No more worrying that I’m sending someone the wrong thing because it says the “Custom” package when I really meant the “Basic” package. I just modify my proposal as needed and my contract references the “chosen package.”

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