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Verbal agreements hurt contractors and construction professionals

On Behalf of | Jan 14, 2021 | Uncategorized

Construction professionals and building contractors provide services that cost thousands of dollars and can improve the value of a property even more. If you work in this industry, you are probably proud of your contributions to your community as you help build or update houses, storefronts and even factory spaces.

Unfortunately, especially if you run your own small business, you might be vulnerable to claims by clients if you don’t take the step of signing written contracts for each project you perform. Although verbal agreements are common, they don’t protect you as much as you might hope.

Minnesota does recognize verbal contracts

You don’t have to write something down to reach an agreement. You and another party can set specific terms and commit to providing a service and paying a specific amount all through verbal communication. In theory, verbal contracts are as valid as written ones.

Those who build, maintain and upgrade houses and other edifices often negotiate verbal agreements when providing a quote to a potential client. It’s normal for a contractor or construction professional to do a quick walk-through and give a rough estimate and timetable for the proposed project.

Unfortunately, some professionals don’t take any further steps to officialize their agreement. It will usually protect you far more to follow up a verbal agreement with a specific contract than to start working without anything in writing beyond a quote.

Written contracts provide clear evidence during disputes

Verbal agreements are no issue at all if your project finishes without any conflict. However, if an issue arises, the lack of a written contract could make it harder for you to defend yourself or to compel a client to pay you.

Eventually, if the customer doesn’t pay them or claim that the work wasn’t done properly, it will be the customer’s word against the contractor’s word if there isn’t a contract. He said, she said claims are difficult to litigate successfully and can put your professional reputation and finances at risk.

While doing the negotiations for a project verbally is perfectly reasonable, committing the final terms to writing and having both parties sign the documentation can protect you from issues like non-payment and claims that you’ve reached the agreement by a client. Getting help drafting a contract that protects you can put you in a more secure position if an issue occurs.