As an Internet attorney, clients will come to me about putting together a deal but the legal fees for drafting the contract would exceed the amount of the deal itself. That doesn’t make sense from a business standpoint and I tell them so.
So when should you not use contracts?
When the worst-case scenario of the other party screwing you over is something you can live with and be able to move on.
For example, let’s say you provide your graphics designer with some stock photos and ask him to create a header for your blog for less than 50 bucks. Could you live with the designer keeping the amount of money you paid up front and not delivering the header?
On the other hand, let’s say you’re outsourcing your web content to a copywriter who is going to charge you $5,000 up front before he gets started. Could you live with him taking the money and disappearing? If not, you’re probably going to want to work with your Internet attorney to put an outsourcing contract in place to legally protect yourself.
Sometimes it is more of a business risk judgment call for you than a legal matter.
Use written contracts where it really matters but don’t turn every Internet business deal into a Supreme Court case. Life’s too short for that.
To your online success!
-Mike the Internet attorney
P.S. There’s a gray area between big and small deals where it is too expensive to have your Internet attorney draft customized contracts but you want the agreement in writing. The InstaSourcing System was created to help protect you in these situations.