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What is the difference between a proposal and a contract?

Proposals are for selling and negotiating a sale!!


Most proposals are written in order to propose a sale to a potential client and a proposal generally outlines a solution of services to the requirements set out by the client.

A proposal can include many parts of a project that the client can agree to or negotiate with you on, if they do not require all of the elements provided in the proposal, they can request to remove certain parts, add additional services and so on.


Proposals are not a binding agreements and it is important to note that the proposal is the beginning steps to securing that project/job. Once you and your client have agreed to the specifics set out in the proposal you are then ready to move on to the contract.


A Contract is a legally binding agreement to ensure you have all your legal ducks in a row!!


A contract is a binding agreement as well as a legal document between you and your client. Think of a contract as your terms and conditions which defines all the legalities of how you and your client will work together. A contract is basically your service agreement between you and your client that outlines all the details of your proposal/project as well as stipulates your terms and conditions and all the contingencies. This is so you and your client have an understanding of the requirements and conditions outlined before commencing the project!


Contracts and Proposals help to prevent any disputes whether it be financial or in relation to work performed and owned!


Ensuring your contract has all the details of the payment terms involved as well as due dates, any cancellation and late payment fees, initial deposits required, termination and notice periods, start and end dates of the project, intellectual property rights, ownership and licenses, confidentiality and non disclosures, indemnification and limitation of liability, Governing Law and Dispute Resolution, Right to Authorship Credit and any other important details that are required.


It is also important to consult a lawyer when creating a contract to ensure it is uniquely suited to your business.


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Jodi
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