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Most business deals depend on trust to some extent, but don't make the mistake of signing a contract, sending it off to a customer, and charging ahead on a project before you've gotten a response. One company we know got burned for $40,000 by doing just that.

The company, a business-systems consulting firm, completed most of the work on a city's payroll system under a contract that had never been returned. Because additional work was necessary, the company negotiated a second contract with the payroll department, signed and mailed it, then finished the job. Problem was, it was the end of the year, and the city had run out of money. The city claimed that the first contract covered the entire job. Because the company had never received copies of the contracts it had signed, it could not prove its claim that a second contract existed.

The moral: insist that your customer sign the contract before you do -- and don't start work before you have the completed contract in hand.

Last updated: Apr 1, 1987




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