Top 5 Contract Mistakes to Avoid

By MBO Partners | June 6, 2017

consultants shaking hands

Contracts are an important part of starting a new project. They provide legal protection, detail services to be performed, and include payment terms and conditions. If you’re new to the process, you may find that drafting a contract is a fairly complicated task, requiring specific key terms, provisions, legal obligations, and ultimately, client agreement.

As a solo-business owner, a simple contract mistake can end up costing you valuable time and money. With your business and reputation on the line, it’s important to carefully negotiate a contract that includes critical terms, safeguards against potential issues, and establishes a solid foundational client relationship. Here are five common contract mistakes to be on the lookout for when drafting your next independent contractor agreement.

1. Vague Descriptions of Duties

In a contract, it’s important to outline the services you will provide as precisely as possible. For example, “independent contractor will perform consulting services for client” leaves far too much open to interpretation and disagreement on the actual scope of the project. When drafting a contract, including details and being specific will work to your advantage. Don’t assume that particulars will be mutually understood—if something is not specified in your contract, your client is not legally accountable for it.

2. Incomplete Information

Creating a contract without estimations can be difficult, particularly if you use an hourly billing rate or plan to rely on outside vendors who may affect your timeframe. However, it’s important to go into an agreement with as much established information as possible. At the very least, scope, responsibilities, and payment terms should be discussed, clearly defined, and written down. Any timeline estimations should be based on careful calculations and data, if possible.

3. Ambiguous or Confusing Language

Just because a contract is a legally binding document doesn’t mean it has to be filled with “legalese” that is difficult to understand. Avoid using highly technical industry terms and jargon that your client may not be familiar with. Likewise, if your client wishes to include a clause that you’re not familiar with, work with them to simplify the request. A contract’s language should be thorough, but also simple to understand.

4. Generic Contract Templates

When drafting your own contracts, referencing a template can provide a helpful guide and outline. However, using templates as a substitute for a custom contract can be risky, as templates may omit sections are verbiage that are particular to your field or project. Templates may also fail to meet the requirements of your state’s contract laws. When using a contract template as a reference guide, be sure to add in additional information to customize it to your needs.

5. Not Consulting an Attorney

Many independent professionals choose to hire an attorney to draft their contracts. This helps to ensure that the contracts are properly written, include all necessary information, and fully protect both parties. Should you choose to draft your own contract, or if your client provides a contract, it is highly advisable to have an attorney review the contract and terms before signing.

Consultants who run their business through MBO Partners receive help with reviewing contracts for potential issues. Don’t hesitate to reach out if you have questions about creating a contract for your next project.

Find independent consulting jobs with top companies through MBO’s marketplace

Join Today!

Related Posts


Top 5 Tax Write Offs for Self Employed Professionals

November 10, 2021

The ability to manage your business expenses is not just good for your company, it’s also a good income strategy as an independent professional. As a business of one, you will incur fixed costs that cannot be billed back to clients. You’ll also need to handle expenses such as health care, retirement funds, and other…


How to Bid on Projects for Consulting and Win

September 29, 2021

If you run your own independent business, you likely know that writing proposals and bidding on projects is an integral part of your job. However, the formal Request for Proposal (RFP) process can be filled with tedious details that can feel overwhelming. Due to the complexity of this process, it’s important to understand how to best assess…

MBO red logo

Filing Independent Contractor Taxes: 4 Best Practices

July 16, 2021

Filing taxes as an independent contractor can be a tricky road to navigate. When you work as an employee, your employer is required to withhold federal income tax as well as Social Security and Medicare taxes from your payroll check, but as an independent you’re on the hook to do this yourself. When you work…

Learn more about the MBO Platform

For Independent Professionals

Start, run, and grow your independent business with MBO

For Enterprises

Find, manage and retain top-tier independent talent