It's time to get together the contract and you've got to know all of the elements that
make your contract enforceable.
Guys, pack up your bags, we're going to go on this journey together and make everything
you need to make this legit.
Alright, so now you've got a contract, you want to know what makes a contract actually
enforceable?
What makes it valid?
In our other YouTube videos, we've actually got some extra cool information on how to
make changes to a contract and what really you should include in a contract so click
here, check those out, make sure that you watch all three of these videos cause lump
together, you've got contracts covered top to bottom, A to Z.
So let's ask the question, what makes contracts really enforceable?
There's some really specific things and it might surprise you on how few there are that
makes a contract legally binding.
Now just a disclaimer here, I'm not an attorney, please don't take my advice as an attorney.
If you ever have any questions concerning contracts, it's always a good idea to consult
an attorney and get their feedback and you can always take contracts over there to your
attorney and have them check through and all of that details but all your contract needs
to legally enforceable.
A contract really only needs only two things to be considered legally binding.
The first item that your contract needs in order to be considered legally binding, if
you need to take it into court, it'll be legally binding are the parties involved.
You need to know who is in the contract and when we talk about the parties involved, you
also would be wise to consider putting their names plus their e-mails, plus their phone
contact information, plus their mailing address.
Any form of contact info you have for any parties are going to need to be involved in
the contract.
So that's the first thing your contract needs to be legally binding is all of the participant
information are needed on the contract.
The second thing you need on a contract is the value exchange.
When the contract gets made, it's because one party is over here saying, I have this
product or service and this product over here is saying, great, I have money, take it and
we're going to swap.
When that happens, a contract needs to take place to explain how those products and services
are going to be delivered and how the money is going to be delivered back and forth so
that everything is kosher between all of the parties.
When that happens, you need to describe in detail how to do that and if you watch one
of our other videos, you're going to find out what needs to be included in that contract.
There are several specific things we just advice that you include in the contract to
make that as clear cut as possible.
Your contract also needs to be legal, moral and ethical.
Let me explain what I mean by that.
You cannot make a contract illegal to the laws of the land that you live in.
It's not illegal contract, it won't hold up in court, it won't be enforceable anywhere
if it's not legally abiding by the laws that exist in your state, that's a no brainer but
consider getting very detailed of with the laws are but if you want to have some fun
with this one, go and research really quirky, goofy laws all over the internet, they're
crazy.
I think for example in Arkitsa, you're not allowed to walk across state lines with a
duck on your head.
I don't know why but that's part of their legal system so don't put that in your contract
if you're in Arkitsa for whatever reason.
Your contract should include in the body of the contract, it should be subject laws where
you live so if you're in a contract or you're constructing a contract, make sure you have
a line in there that says, subject to the laws of this state or wherever you're in in
the United States, or subject to the laws of whatever land you're living in.
So i all of my contracts, you will find "Subject terms and laws in the state of Utah."
You'll find that in all of my contracts because I'm just covering my basis okay?
So that's legal.
Make sure that your contracts are all legal.
Second thing is moral.
You need to make sure your contracts, if you really want to have quality contracts, it's
got to be moral.
You cannot have a contract enforced that was signed by force.
So as a crazy out there example, if someone was under a thread of life to sign this contract,
that contract won't actually hold up in court.
I know that won't apply to most of you but just consider that if your contract is forceably
entered in to, there could be a client that considers that contract as forceably entered
into.
If there's any consideration for that at all, there's a good chance your contract won't
hold up, won't be hold up in court and won't be enforceable should your contract need to
be in that position.
Now when I say ethical, your product needs to have the right value exchange within your
contract so before anyone enters into contract with you, they need to know exactly what your
contract says.
How may times have you gone through either online or in person and clicked the box that
says, I accept the terms and conditions of this whatever it is that you're doing and
you haven't actually read them.
Do yourself a favor, read them, read all of them.
They're eventually going to sound very very similar but there are some surprising things
that you'll find in those acceptance of terms and conditions.
Take for example, Facebook.
Now a few years ago, there was a big to do in the news and all of the places about Facebook
messenger about how it was using your camera, about all these things that was doing presumably
behind people's backs.
Now there was a big hype about that but remember that when you signed up for that service,
it's not only was a free service but you had to check the box, I accept the terms and conditions
of this product or service or of Facebook's specifically before I can use it which means
that you agreed to that system when you started using it.
Does that make sense?
When you agreed to the system, you really don't have any choice but by the abide by
the terms of the contract.
Now this contract that you made between Facebook and you, between messenger and you and yourself
was a free contract.
It was like, I'm going to give you this amazing service of you being able to text and message
and video chat with anyone all over the world for nothing, all you need to do is abide by
the terms and conditions of the contract, all you need to do is check this box.
Pretty easy contract to sign but how often do we actually look at what's inside.
To be a good responsible consumer, read the terms and conditions that you're clicking
and that's probably the most hours, you'll probably spend maybe 24 hours of your entire
lifetime reading the terms and conditions.
I know it seems like a lot but it's going to be worth it in the end and you might even
find that you are more likely to either sign up or not sign up depending on the terms and
conditions of the contract.
The last thing that a contract needs to be legal, you've got your parties, you've got
your value exchange, those are the two main things but it has to be in writing.
A verbal contract is not always enforceable, a handshake contract is not always enforceable.
In fact, I got to tell you, I was down in Costa Rica recently and I heard about this
real estate exchange of a man who had just celebrated his hundredth birthday and he got
electricity on his land for the first time, just two years ago.
The funny thing about this was that the man bought the land for 500 Colones, that's the
currency that they use down in Costa Rica, and he bought it with 500 Colones and a handshake.
Now remember, this is not first world stuff, this happened several decades ago with just
a handshake.
Now the fascinating thing was that 500 Colones is equal to about 1 USD and it's actually
a little bit less.
And he said, "You know what?
I'm going to give you a handshake on this, I'm going to pay you 500 Colones but I don't
have all 500 now.
As a matter of fact, I only have half so I'm going to give you 50 cents as it were."
About 40 or 50 years ago, 50 cents, that's still not much to buy 17 acres of land.
So he bought it for 50 cents and a handshake saying I will pay you the extra 250 Colones
within the next year.
For them, he enforced that contract and that contract was payed, it was done and the man
owns the land for a buck now, you know, and it's 17 acres of amazing land on the Costa
Rica riverbank but your contracts can't be like that, guys.
This is a whole different world that we live in, you've got to have a contract that's written
out in writing and if you really want to have effective contract, you're going to have multiple
copies, back up of your back up of your back up.
I'm going to have a copy in my e-mail address, I'm going to have a copy stashed away in my
hard drive, I'm also going to take the time to print out an old school paper copy and
file it away in my drawers and keep it in my documents.
Sorry guys, you got to get the file box.
If you're an entrepreneur, you're going to have to come and get yourself a filing cabinet
for all your amazing contracts.
Now imagine going through a contract that was 17 acres of land.
First of all, I don't know how to, there's not so many places that you can buy that anymore
anyway but imagine buying it for a buck and a handshake, not even a buck like, a half
a buck.
50 cents down and a handshake.
How would you feel if that contract happened to you.
Would you feel like, you know, that was enforceable.
What if something happened to the land?
What if you were the seller and the land owner said, oh, you know, there was a flood and
I lost half my land and then there's flood form the river that washed my home away and
everything on it and half the 17 acres is gone, I want my money back cause now I only
have half the land.
What are you going to do?
You have no back up, you have nothing but a verbal agreement between two people that
no one else was to and nothing in writing.
This is one of the reasons, a very exaggerated example of why you want to have a solid bullet
proof contract, you want to keep that in mind when you're constructing your contract.
If you're in a contract and you want to make sure it's enforceable, it is if you've got
those key elements.
Again, I'm not an attorney, don't come to me for advice for attorney stuff, talk to
your attorneys, I always recommend as back up but again, contracts are very very simple,
they're easy, they're not really complicated.
You don't have to understand or speak legally to understand the basics of a contract.
This is super simple, goodluck with yours.
Okay, not as hard as you thought, right?
So hit the subscribe button, I'm going to see you tomorrow and we're going to be having
a great conversation on how to boost more of your business.