Who Needs Contracts
A CEO (a seller) asked me the other day: do I really need contracts for my business?
There’s a number of angles to the answer.
When money changes hands, there’s nearly always going to be a contract even if there’s nothing written down (electronically or otherwise). The only thing is: if nothing’s written down, what exactly has been agreed?
If you are getting paid upfront and what you are selling is relatively simple and uncomplicated, that’s 99% of your issues dealt with. You can sensibly say: I’m getting all the money upfront, and that’s enough of an upside that it outweighs any clarity I get from a signed contract.
But if you are not getting paid upfront, then having something written down (electronically or otherwise) is an important form of protection against non-payment.
And if you are selling (or buying) a product that is not simple or uncomplicated, or which comes in a number of different variations and flavours, having something written down (electronically or otherwise) is important too. Establishing clarity at the start reduces the chance of arguments later on, particularly if the people involved change.
People often think the main point of a contract is to create a legal artefact. It’s not. The main point of a contract is to create clarity as to who is doing what.
4th November 2025