Legal contracts - lead gen

[bu06nne]

Hi

Advice welcomed on this situation...

I have a verbal agreement with a merchant, where I send them leads and then invoice every 7-days.

My expenditure to get these leads has risen dramatically - we probably spend around £1,750-2k per week.

My concern is what would happen if a) merchant decides to not pay and stop working with me or b) they go bankrupt.

A loss of £2k would be a big dent in our profits...Do you think I should get them to sign a legal contract? Is there such a thing?

Equally, I don't want to come across as a w***ker who doesn't trust them...(I have daily contact with the owner and it's quite a small firm - yet to miss a payment)

Cheers

 

[Retired_Member38]

if its b) then a contract is going to be worthless anyway.

You can get them to sign a legal contract which is slightly better than a verbal one, but ultimately if they don't want to pay you , they won't.

Even with a verbal one you can still likely prove it was in place if there is a dispute. As you can clearly show the past history of you delivering the leads and them paying £x for them, along with presumably emails and so on to back it all up.

If you're only going to lose a weeks expenses if it goes tits up... I wouldn't stress over it and just keep working as normal.

 

[accelerator]

Hi

Advice welcomed on this situation...

I have a verbal agreement with a merchant, where I send them leads and then invoice every 7-days.

My expenditure to get these leads has risen dramatically - we probably spend around £1,750-2k per week.

My concern is what would happen if a) merchant decides to not pay and stop working with me or b) they go bankrupt.

A loss of £2k would be a big dent in our profits...Do you think I should get them to sign a legal contract? Is there such a thing?

Equally, I don't want to come across as a w***ker who doesn't trust them...(I have daily contact with the owner and it's quite a small firm - yet to miss a payment)

Cheers

Isn't a contract always a good idea?

Is there a way you can get them to pay you a deposit or a week in advance? That way, if there is a problem, you are protected.

Rgds

 

[martin-s]

Contracts are only worth what you're willing to pay to enforce them.

 

[accelerator]

Contracts are only worth what you're willing to pay to enforce them.

True, but isn't it always worth having something written down?

Rgds

 

[Adam H]

Verbal contracts are worth the same as written ones, the difference is you still have to prove whats been agreed which is obviously harder unless you've recorded the conversations.

That being said if you've had emails outlining the terms of your agreement they would also be enforceable.

What most freelancers have difficulty with is that a verbal contract isnt discussed properly in the sense that the client often feels its rolling, there is not set period of time which it guaranteed to have that verbal contract honoured so if one month they decide not to pay for the service then they simply dont have to.

With the values you are talking about.....there wouldnt be a chance in hell be risking any kind of security based on a verbal contract, its a tough subject to approach and if you can pass it off as a "must do", rather than you getting itchy feet then do it, if they are aware of the expenses you lay out to provide the service to them explain they are seeking a contract from you, and that needs to pass down the line which you also need it in writing that the service is for x amount of time.

In a round about way this is a nice little explanation of verbal and non-official contracts i.e emails/skype chats etc : http://theselfemployed.com/law/dealing-with-and-enforcing-verbal-contracts/

 

[accelerator]

In a round about way this is a nice little explanation of verbal and non-official contracts i.e emails/skype chats etc : http://theselfemployed.com/law/dealing-with-and-enforcing-verbal-contracts/

Thanks, useful link.

Rgds

 

[bu06nne]

Thanks all for the responses! I have everything down in email and past history of selling leads - I think I will just roll with the punches as and when they come.
Cheers

 

[Retired_Member38]

Thanks all for the responses! I have everything down in email and past history of selling leads - I think I will just roll with the punches as and when they come.
Cheers

One thing on this front - when the excuses start coming, just bin them immediately and get an alternative monetisation on there. As soon as this starts, you need to go into damage limitation mode. I've seen too many people try and work through this and offer payment plans, letting them keep the incoming leads etc.... 99% of time all that happens is the losses get worse.

We had to cut a payday network off for non payment... looking back on it I'm certain that doing so immediately simply stopped the damage there and then.