• Tanya S Osensky

Contract Mistake: It's Probably not Worth Suing Over a Verbal Contract

Most of the time, it’s not worth it to litigate over a verbal contract because you never know how it’s going to end.

My client Lester is a freelance consultant and he was excited to get his first gig to do a big project for a big company. The company told him about the scope of the project, and they agreed on his hourly rate by phone. But he was so excited, that he did not get a written contract in place before he started responding to messages and taking calls and meetings.

Overall, he did about twenty hours of work on the project before the company gave him a contract to sign.

Not surprisingly, their contract was very one-sided … in favor of the company, of course. He felt boxed in, and at that point he did not have any leverage to negotiate anything. He signed their contract, but he was already starting to feel uneasy about the project. His excitement was starting to fade.

Then the company refused to pay for those initial twenty hours of work. The company said they did not have any agreement until the written contract was signed.

Lester could sue for payment for those twenty hours, but he’d ruin the relationship, he’d have to go to court and testify, and of course the company would get to testify too.

There was no guarantee that he could prove that their agreement existed before the written contract was signed. He’d spend thousands of dollars on legal fees to pursue payment for those twenty hours of work, and there was about a 50-50 chance of losing.

It was not worth it. Lester now understands that contracts should be signed before starting work. It was a hard lesson learned.

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