Know Who You’re Dealing with and How to Relocate Your Signed Contract
There is one piece of advice that we wish every client knew: always know who you are doing business with and get your contracts signed! If you think we sound like a broken record, you are not wrong, but it is shocking how many problems are the direct result of not following this advice.
When it comes to contracts, you need a process for getting everything signed and filed correctly. There are two major issues that we want to address and the first is not knowing who you are doing business with. You may think you are working with ABC enterprises but then you search through the Secretary of State, and you discover that they are registered as ABC services and enterprises; these are two separate companies and this can cause major issues if you end up suing or any kind of legal problem. The best resource for researching clients is through the Secretary of State, most of them are free, and you can enter in the business to search to see what the registered name of the company is and who is it registered to. This should always be the first step in setting up a credit process.
The second biggest issue that we have seen is that companies will not get the contract signed or they will not keep a record of signed contracts. The first question we ask at the beginning of any legal process is: do we have everything? Then: is there a smoking gun that would allow us to bypass a trial and simply summary judgement through the process? After that: what documents did you think you sent over? Did you?
We have been in a litigation process, or even a judgement enforcement, and a client has come to us and said, “We later found the contract in so and so’s desk.” This is problematic if we have already gone through the process thinking otherwise because the trial can be extended, their attorney may not settle, or you cannot ask for attorney’s fees if the contract is not signed. So please, check with everyone! As part of our system, on our CRM applicant tracking system or on staffing software users can attack a digital copy to the record to ensure that it is there. You can even use other online services to do this, or if you are old school, then print out a copy to keep on file. It is always smart to keep a paper copy because there is always the chance of digital corruption.
Since the bar requires that all contracts be held for seven years, have a system for organizing and filing these away. This can be especially important because if you have a long-term client with multiple contracts. The general rule in this scenario is that last contract signed should apply to everything going forward AND everything prior to it to cover stuff in the past. We have encountered weird situations where a client has multiple contracts which include branch and national contracts at the same time. This can become a chronological nightmare to sort through which candidate falls under which contract; unfortunately, this can open up a whole can of worms of different kinds of contracts: retainer search, replacement guarantee, rebate, credit, etc. Essentially, there are many ways to make contracts complicated and we urge you not to!
Here is your checklist:
- Always check with the Secretary of State, do a quick search, or even ask your client for the corporate name and where they are incorporated (which is a conversation for another day).
- Have a system in place for tracking contracts. A general rule of thumb is that if you cannot put your hand on the contract, then you should not have bothered with getting it sign. If you have multiple contracts, be able to sort through them.
- Always have a digital and hard copy of any document.
If you need any further advice on signing contracts and setting up credit processes with clients, or if you want to hear about the merits of a color coordinated filing system, then contact Samantha Cole at firstname.lastname@example.org.
Quote 1: When it comes to contracts, you need a process for getting everything signed and filed correctly.
Quote 2: There is one piece of advice that we wish every client knew: always know who you are doing business with and get your contracts signed!