What Can Happen Without a Contract?
April 12, 2024
What is a contract?
A contract is a legally binding agreement that can occur when only at least two parties are involved. Even more so, it provides a safe manner in which all the parties promise that certain rights and obligations will be fulfilled by each member who signed the contractual agreement. To put it more easily, a contract is based on a promise that each singing member agrees to satisfy. Yet, for a contract to be legally binding it needs to allude to specific criteria as the ones listed below:
- Acceptance
- Offer
- Awareness
- Consideration
- Capacity
- Legality
What can happen when you don’t establish a contract?
- Late Payments: If a client refuses to pay your invoice, we’re sorry to say that you’re not getting any money. And the worst part? You can’t even take him to court since you have no evidence regarding the said agreement.
- Unreasonable Demands: Without freelance contracts, there are no clear specifications nor boundaries for the tasks expected of you, which can lead to exploitative practices where the client may take advantage of your time.
- Lack of Enforceability for Agreed Upon Terms: Let’s face it – there is no legal foundation for enforcing what was discussed in the absence of a contract. This means that if your client fails to fulfill their half of the deal, you, as a freelancer, may have no recourse for resolution, which, ultimately, leads to… ↓
- Potential Legal Battles: In the event of a disagreement, we can always present the signed contract as a liability. But without it, everything that was discussed and negotiated becomes null. And eventually, it becomes a “he said, she said” situation since the terms of the agreement are merely verbal and, therefore, not binding. So who ends up winning? Without any clear evidence, generally, the one with the higher power. And unfortunately, that’s rarely us.