Avoiding Legal Problems When Trading Services
It’s tempting. So tempting.
A potential client comes to you that provides a service you need, and instead of paying one another, you decide, hey, let’s trade services.
Been there. Learned from that.
Learn from my big mistake when trading services with someone.
I had this really cool, kind of high-profile professional colleague that contacted me for legal support, and didn’t want to pay “big firm rates” and she wondered if I would be willing to trade services with her. She agreed to provide a number of hours of service to me, if I could provide some trademark services for her.
I was super enamored with everything she’d built already and thought it would be a great opportunity to impress, so I said yes.
(This was kind of a “I have to prove myself” era for me.)
SO I got about 3/4 of the way through the services I was providing.
But she wasn’t getting back to me. For a while.
Finally, she contacted me and was like “Hey, I want to introduce you to so-and-so… she’s going to be taking over our legal work from here.”
And I was like… okay… what about all of the work I did. What about the services YOU promised.
…except I didn’t say that. I just took it as a loss.
I thought about invoicing her… but I didn’t. I just kind of chalked it up to a loss.
What’s the legal issue with service trades?
The issue is that nine times out of ten, there is no contract.
You agree on a trade, you deliver, they don’t.
Then what? How do you “enforce” the terms of what you agree to?
Just like any instance where there’s no formal contract, it would come down to a little bit of he-said-she-said.
Strike that: expensive he-said-she-said.
Questions you’d have to fight about include:
What did you actually agree to?
DID you actually agree to specific terms, or was it left up in the air?
Did she know the value of what you were providing? (If she didn’t, it could be challenging to try to get any $$$ from her, now.)
Was there approval to get started? Did you need approval to get started?
If you don’t have contract terms nailed down, it’s hard to argue that those terms were breached.
Preventing legal issues when trading services.
So can you guess what the fix is?
If you’re trading services, send a contract. Bind the client to her promise!
“But Maria!” you say. “There’s a whole compensation section in my contract. What do I put there?”
Here’s an idea you can steal:
Instead of a dollar amount, you could say:
in lieu of payment in the amount of $___, client will provide… and then describe EXACTLY what you’re expecting from her.
You could even add in if company fails to deliver these services, client will be responsible for the full monetary value of $____.
So learn from a time I didn’t follow my own advice.
And if you need some solid contracts in place, look no further than The Legal Apothecary Library.