Contracts in the Time of Corona - Scenario Series
I’ve been getting a lot of nitty gritty questions on contracts and I know many of you are probably hearing the same questions as coaches or asking them yourselves so I’ve been giving some thoughts on a few scenarios people are running into so that you can move through them easily and continue to have a thriving business...here’s a few for ya! (p.s. This is not legal advice, just education!)
Scenario: You are a coach and your client is asking for lower payments or a deferred payment plan.
What to do
A great way to move forward is to amend the contract with some new payment terms that you can both agree on and feel good about. Recognize these are crazy times and do your best to help your client get through it (WHILE maintaining your cash flow and keeping your business going as well). This may be extending payments for a few months longer, lowering payments and taking away a few sessions, pausing the contract all together, or something in between. The main thing here is to remember we are all human, having a heck of a crazy human experience. Enforcing your contract now to the letter will likely cost you a big chunk of time and money, and that is likely not worth it. Instead think of this as an opportunity to show grace and continue to bring in money to your business.
Scenario: You are a coach and your client wants to cancel their contract
What to do
Because most of us work online, the ability to do our jobs hasn’t changed as much for some other industries. We can still have zoom calls, work out of basecamp, and in general serve our clients. Yes it’s harder now, probably because we have spouses, kids, or others that need our attention. It’s harder, but it’s not impossible (if it were impossible, then people could claim “impossibility of performance” but in the context of online coaching, that is going to be a hard sell).
So if your client is wanting to cancel, it’s not because they can’t come to a coaching call, it’s because their schedule has shifted and it’s really less convenient to come to a call, or they are worried about making payments. Neither of these really gives them the ability to just cancel the contract. Now is the time to put on your coaching hat and help them through this by offering some alternatives, perhaps more convenient calls or a few weeks of voxer versus a full session. Maybe an extended payment plan to help ease the money worries, the best way to do this is to amend the contract, meaning you both agree in writing to new terms. The bottom line here is that this isn’t an excuse for your client to run and void a contract, perhaps an updated term or payment policy is all that is needed.
If you do want to enforce the contract you have, you can send a demand letter attaching the contract and remind them of their obligation. If that doesn’t work you can then look to the dispute resolution section on how to deal with a breach of contract.
Scenario: You are a coach and need to cancel a retreat or live event
What to do
Most retreat contracts that your clients have signed include what is called a "Force Majeure" clause - which in French literally means "greater force" - and covers natural disasters, terrorism, travel advisories, etc. This clause basically means if something like this happens (for example, a global pandemic), it removes liability from not being able to fulfill the contract.
What we are seeing now is a lot of live events and retreats being cancelled. If you find yourself needing to cancel an event, look at your contract for guidelines. I’ve had more than a few customers that bought my retreat contract tell me how THANKFUL they are they had this solid contract to fall back one, in fact, a coach just purchased in January for her retreat and whew, she was so glad. Usually you have a few options to offer your participants:
- Reschedule for a later date - work with your participants to find an agreeable date for everyone
- Offer a refund if you plan to not reschedule
- Offer another service they may be interested in putting their money towards (another event, program, etc.)
Your contract will outline specifically what you can hold on to in terms of money, for example, a lot of service providers (florists, photographers, etc.) have a non-refundable retainer written into their contracts.