A little mistake that cost a consultant $2875

Excited about closing a new consulting deal, Edward rushed to start the job. Mary, a VP at a local software company, had agreed to hire him to develop several sales tools to help sell software to call centers. He worked furiously on the new project for several days and fired off a draft and a status update at the end of the week.

Edward* didn’t hear anything for a few days, so he waited a little longer. At the end of the next week, he followed up with a phone call. To his surprise, he heard an unfamiliar voice. “Uh, I was looking for Mary,” he said, uneasily. “Oh, Mary’s no longer with the company,” replied the voice.

Although Mary had agreed to hire Edward, she had never kept any documentation. And Edward had simply started the project, thinking that a verbal deal was enough. But, even though a verbal deal is legal where he lives, Edward had a hard time convincing Mary’s boss that a deal had ever existed.

Fortunately, Edward was able to file in small claims court and win his money back. But it took a considerable amount of time and energy. He spent hours preparing for the court case and, even after he won, he still had to follow certain processes to get his money back.

Between chasing after the delinquent client and preparing for the court case, Edward spent about 75 hours of his time. Given that he usually billed out at $65 per hour, he lost $4875 in earnings that he could have made from other clients. Even though he won $2,000 from Mary’s former company, Edward never made up for lost time.

What could have saved Edward? A simple written contract.

Even if you live in an area where verbal contracts are legal, it’s always easier to have something in writing. Check out the contracts and legal documents from our affiliate program at US Legal Forms.

*Names have been changed.