Friday, January 30, 2009

Verbal Contracts and Bartering.

The times have been hard for Ben, a single father in Toronto. He can't afford to pay for his daughters piano lessons anymore. He approaches her teacher. “I will fix your computer if you teach my daughter piano.”

The teacher replies, “Cash is better for me, but my computer does need some work, so O.K.”.

Straight forward enough? Unfortunately it's not.

Verbal contracts are at risk of being misinterpreted. When there is a verbal exchange of promises, it is critical that both people are on the same page. To do that both need to be clear and concise.

Ben has made an offer to exchange services. A great idea given the times. But what he has offered may be different than what piano teacher expects. Does Ben have to buy all the computer parts that may be broken? What if the computer can't be fixed despite his best efforts? How many lessons are included?

The devil is in the details.

Verbal contracts are enforceable in many circumstances. You can sue someone for breaching a verbal contract. But to sue someone, and win, you need to prove your case. To prove your case you need to convince the judge that what you are claiming is what happened. Ultimately the judge needs to be convinced that both people had an agreement. Therefore protection all starts at the time of the agreement.

Here are the things you should do when you are agreeing to something verbally. This will help make things clear for both parties. Should you be in a situation where this ends up in court, you make it easier for the judge to agree with the facts.

Think, ask, agree and follow up.

Think. Think about what you want. It may sound obvious, but most people don’t think about what they want. They allow the offer to drive the bargain, rather than what they want to drive the bargain.

In Ben's case, he wanted lessons for his daughter. So he should think about that and build on it. How many lessons, and for how long? Now he has a rough idea of the value, and can present a barter offer that is fair and balanced.

Ask. Ben did not ask what the teacher needed for her computer. He just threw out the computer offer. When the teacher agreed, he did not ask about limits. He did not clarify. Asking before agreeing will bring the clarity. Try to make sure that there is an “end” to the offer. 10 lessons, for 10 hours of computer repair.

Agree. Once the basic elements are understood, then agree. When you are agreeing, repeat the basic elements. While shaking the other persons hand simply sum up the key points. Always look the other person in the eye, with a smile. That will show sincerity, and demonstrate you are both on the same page.

Follow-up. Finally, follow-up. Sending an email to confirm what was agreed is always a great idea. But if email is not an option, a phone call is fine. In your follow-up make sure you point out that if there are questions or problems to let you know. That offer of clarity can help significantly if this agreement goes south.

Now you have an agreement. The facts are clear, the obligations are clear, and should this end up in court, your complaint will be clear.

So the next time you are going to barter or exchange, THINK, ASK, AGREE and FOLLOW-UP.

Happy bartering.

Copyright © 2009 Peter MacSweeney.
All rights reserved. Reproduction in whole or in part without the express written consent of the author is forbidden. Contact the author through the comment form for all inquiries, including media.

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Thursday, January 01, 2009


Thank you for responding to my marketing campaign.

This blog is a very frequently updated series of articles, and posts that deal with every day legal issues.

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As a start read this post about verbal contracts and bartering. After that you can subscribe to get the posts sent to you via email.

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