Collaborating in business is based on trust. However, insisting on a written contract with a collaborator is not a sign of distrust. The contract serves several important purposes for your entrepreneurial venture or real estate investment, such as the following:
- Clarifies the financial terms of the collaboration (who contributes what, who gets what).
- Specifies the duties/obligations of each party (who does what).
- Manages expectations (what are the benchmarks, timelines and deadlines).
Contracts for collaboration might take the form of a joint venture agreement, LLC operating agreement, independent contractor agreement or other forms. The more detail is included within your agreement, then the more clarity you and your partner(s) will have to execute the vision successfully.