Elementary school kids across the country have found decades of profit on street corners selling lemonade. However, None of these young soft drink entrepreneurs have had a business license or contract. This begs the question, then, at what point does a freelance project become something that requires legal counsel? Does a $100 service deserve a full-blown contract?
Many small business owners’ first steps into an industry are projects for close friends and relatives. The business begins to take more time out of the workweek until it accidentally becomes a full-time commitment. While this lack of intent is understandable, it is dangerous business.
The Simple Answer Is This: If You Are Doing Paid Work, You Need a Written Contract.
A written contract is like insurance; there is no benefit to buying insurance right after a crash. In the same way, a written contract ensures that the transactional relationship between you and your customer is understood and agreed upon by both sides. It also guarantees adequate compensation for your service and obligation of service in the event of compensation. Without a written contract, you’re simply left with the general understanding by all the parties involved. This often quickly spirals into a “he said, she said” situation with no agreement in sight.
No one is perfect. Everyone makes mistakes, especially when it comes to memory and finances. No matter how judiciously you prepare, mistakes in business are a matter of “when”, not “if.” A written contract minimizes these mistakes, turning them from intangible squabbling to real and legally straightforward problems. Crafting an agreement in writing with a serious approach to liability and accountability is absolutely necessary to guarantee payment and avoid the most disastrous of scenarios.
Here’s an example: You learn how to build cabinets. A friend hears about your quality workmanship and asks for an entire kitchen set. After accepting and mutually agreeing to decide on the cost after completing them, your friend seeks to delay the conversation further, as his wallet feels a bit empty. You refuse and rightly demand compensation for your work. What are your legal options?
Without a Written Contract There May Be None
Proof of the transaction terms does not exist without a written contract or formally signed record. At this point any grievances you have are essential “he said, she said.” Better luck next time. That’s something that will be both times consuming and expensive to fight about in court.
Many will still take their chances and not craft a binding contract. They’ll cite the small amount of work they actually complete along with the cordial relationships they share with their customers as a reason to disregard documentation. If you want to be paid, respect the rights of your customers, and desire to safeguard your interests, then perhaps some reprioritization may be in order.
Be prudent. Take the time and effort to seek professional guidance in writing contracts. No matter the industry, your work deserves compensation and your rights deserve protection. Find out how to protect yourself and your work in the Northwest by visiting our webpage here and our office in Post Falls.