Sometimes new contractors begin working without a signed contract. Below, we have discussed the risks you may face doing so and why contracts do not have to be in writing for it to be legally binding.
Should you begin contracting without a contract in place?
We believe you should only begin working once a contract is signed as this clarifies the position in which you stand with a client. Furthermore, this prevents any disputes that could take place as the rights and obligations included within your contract for both yourself and your client would quickly resolve any issues.
In addition to this, many businesses are put off by the cost of a professional drafting. However, this will ensure that your client is aware of the amount they are required to pay as well as invoice and payment dates. In the worst case scenario, if you had no option other than take legal action against a client then this would provide support for yourself.
Does the contract have to be a formal written document?
Many people are not aware that a contract does not have to be written to be legally binding. Although, it is possible to use this contract as evidence, you have to be able to prove T&C’s despite how troublesome it may be to do so. Other documents that could work in your favour as evidence include email conversations between both parties and courts will review these during cases.
Emails that state an offer of entering a deal with clear terms and conditions with the opposing party accepting this offer, will usually be considered as a valid contract in court. Although we still advise contractors to create a formal written document to protect both their company and their assets that affect the contract.
What happens if an agreement has been made but a dispute occurs at a later date?
Regardless of whether you have a written or verbal agreement, in some circumstances you will come across, the opposite party having certain rights to protect them. If the client is not satisfied with the goods that they are supplied with, they may be protected by consumer law, which will give the individual certain rights. However, if you’re able to prove these rights are a breach of the terms of your contract, you are able to appeal against this if it was taken to court.
Here at Gorilla Accounting, our specialist contractor accountants will provide unlimited professional advice, which is all included in our all-inclusive accountancy package for a fixed price of only £85 + VAT per month! To arrange a free trial of our software, contact us on 0330 024 0406.
