A lot of event rental business owners pride themselves on their sales or negotiation tactics. However, tons of business owners put themselves in real danger when they don’t get the proper paperwork in place! There’s a difference between “quotes” or “proposals” and actual event contracts. It is absolutely essential to secure a fully signed event contract before you promise away your valuable time and inventory. It’s also incredibly easy to get one!
First of all…
What is a Contract?
A contract, or “Terms and Conditions” is a legally enforceable set of promises. It is law created between parties. It’s formed when there is an offer (party rental company says we can rent Chiavari chairs for $X), an acceptance (client says yes I want those chairs for $X), and a bargained-for exchange (basically money in exchange for goods/services). The parties must have mutual assent (intention to create a legal relationship).
A contract is also where you set forth all your terms. This can mean guidelines such as cancellation policies, damage policies, and payment policies. When someone agrees to rent from you, there is more to it than just an agreement that the chairs cost a certain price. There should be agreements surrounding what happens if the chairs come back a day late, come back broken, or never come back at all! Keep in mind that some folks may have never rented before, and that “common sense” won’t hold up in court!
It behooves you to have your terms and conditions looked over by a attorney specializing in contract law, and/or the event rentals industry, before sending any documents to clients.
What is a Proposal?
Your proposal (or quote) is an offer sent to a client. Goodshuffle Pro allows you to combine the proposal, contract, and invoice, so that you can be sure your client realizes that they must agree to your terms to get the proposed pricing. Sending these forms in Goodshuffle Pro's digital format has resulted in 50% of contracts getting signed within 4 hours, and 70% signed within 24 hours. Once the contract is signed, 50% of clients get their first payment within 5 minutes.
Of course, you probably want to make sure that it is not just a rogue employee making promises without actually having the skill, knowledge, and permission to do so. Clearly state who may enter into contracts in an employee handbook. Not everyone is good at sales, nor understands the nuances of proposals! However, the good thing about building a quote without having to re-invent terms and conditions, is you can have the proposals built without ever needing to touch the legal language.
When the client accepts, signs, and pays–your event rental business is bound to that client. What this means is follow through; otherwise, you may be in breach.
Why Are Event Contracts So Important?
Contacts are crucial in an event rental businesses where liability is extremely high, there is high potential for something going wrong, and it defines the parameters of the relationship. The more upfront your event rental business is about the terms of service, the better the relationship. Here is a small sampling of clauses your party rental business might consider in your contract:
- Damaged Inventory. What happens when a client damages the rentals? At what point is he/she responsible (on the truck, on site)? Do you have an amount stated, or is it case-by-case basis?
- Impossibility. Certain things may happen like natural disaster, or acts of terrorism (force majeure). Your party rental business needs to have a safe out if things are beyond your control.
- Credit Card Authorization Language. You need to note that you have the right to charge for the damages listed, to ensure you don’t incur any chargebacks.
Why Do I Need A Signature?
Now that you have wisely spelled out the exact terms of your goods and services, you will want your client’s signature on the contract. According to FindLaw, “the signature is the most common way to indicate that you have read and agreed to a contract.”
Luckily, the ESIGN Act is a federal law passed in 2000. It grants legal recognition to electronic signatures and records if all parties to a contract choose to use electronic documents and to sign them electronically. This makes collecting these legally binding signatures as easy as typing your name on your smartphone!
Getting Revised Signatures
Each time you adjust a proposal, you are essentially creating a new terms with the client. That’s why Goodshuffle Pro will turn a project red when you’ve adjusted a previously signed contract. They’ll remind you that you really ought to get a fresh signature as a business practice to protect yourself from a situation where the client may claim they didn’t agree to pay for certain items or services. Event contracts are a breeze with the right event rental software!
Curious how Goodshuffle Pro can help you grow your event rental business?