I can remember sitting and reading Meighan O’Toole’s old art blog, my love for you. It was the summer of 2010 and I was working as an intern at a law firm in the Castro neighborhood of San Francisco. I knew that once I graduated law school I was going to open up my own law practice and serve artists.

And I knew that before I opened my practice I needed to cultivate a stronger creative community. So every chance I got, I read her blog and jotted down an artist I wanted to learn more about or a place I should visit. And those notes formed the basis of the community I started to cultivate.

I’ve admired Meighan ever since and all the big and small changes she’s made in her career. At some point, I was brave enough to strike up a virtual friendship. And now, she’s my go-to resource for learning how to build authentic online communities.

All of us have experienced a situation like the one that Meighan is sharing today. And it’s a perfect reminder of why contracts are so important, even with friends.

Without diving into the nitty gritty, tell us a little about a time you learned the “legal” ropes…

Last year I hired an acquaintance for a service. She was someone I had known casually in a social setting, and I always liked her. I had seen her work and website through posts she shared on her personal Facebook account and liked what I saw. Eventually I needed the services that she offered, plus I wanted to support her. It’s always been important to me to support other small businesses, so this seemed like a great idea all around.

We had one meeting, and it went really well. When I left I was really excited about receiving my items in what I assumed would be within the next two to three weeks. I paid her a week later but she made no mention of when she would deliver anything so I waited.

And waited.

Annnnnd waited.

By the time 3 weeks passed I decided to reach out to her. The first of many red flags was that she treated it as I was just saying hello. I realized I had to ask her because she was not going to volunteer any information. She replied that she was working on things. Great! I said.

A couple weeks passed and no contact again. By this time it was about 4 weeks out from our original meeting. I reached out to her again, and asked when I could expect things. She said she was still working on everything, but hadn’t been feeling well. I said no problem, that I understood that things come up but I felt at this point we should chat in the spring and asked that she send me a refund. She was taken aback and said that she couldn’t do that, it would set her back. She said she would get me things shortly.

Another two weeks passed and I reached out again. After a few more days of excuses on her end, she eventually sent over examples of less than par items and much fewer than what I had expected to receive.

By this time I basically knew what the story was going to be. It was clear that I was not going to get what I thought I had paid for. I was out $250 and had nothing to show for it, at least not something I could use confidently.

Yuck, that doesn’t sound fun, how did you feel at that moment?

I felt an enormous amount of emotions! I was angry because I felt like I had been robbed (It was only a couple of hundred dollars, but still. That’s grocery money for more than a month for me!). I felt deceived as well.

But the biggest emotion I felt was shame. So much shame, because I knew that while I had been taken advantage of by someone who was just simply unprofessional, that ultimately it’s on me to protect myself. I took her at her word, I didn’t ask for a contract, or ask the necessary questions. Questions like what is your turnaround? When can I expect delivery? How many items will you deliver? I had worked with similar businesses in the past, so I assumed she would work and deliver in the same way. And you know what they say about making assumptions…

Mostly I felt like I let myself down by ignoring something I already knew: always have a contract.

Did this impact your creative business? How?

Honestly, it really messed me up for a bit. I was really thrown off kilter for trusting someone to deliver something and then receive useless goods. It really confused me that someone would think this was totally acceptable behavior, especially someone I knew and trusted.

Anyone that’s started a business within their first 3-5 years knows that sometimes money is stretched really thin. To have that money gone and nothing to show for it, and know that I would have to hire someone else caused a lot of stress for me which ultimately impacted how I worked for a bit. It was around the holiday season, and the items I had asked from her I needed for upcoming projects very soon. So I was stuck.

I was really thrown off kilter for trusting someone to deliver something and then receive useless goods.

What ropes did you learn from going through this experience?

I learned three big lessons around communication.

This experience made me understand that there should always be a contract when money is changing hands. Always. No matter how well you know the person. Having a contract in place just lets everyone know what they can and should expect, and if anything goes wrong it can dictate how things should proceed. Had a contract been in place I could refer to it when things started to go sideways: “Our contract spells out that you were supposed to get me this number of items within this time frame and you didn’t. Please issue me a refund.” I would have actual legal recourse. But without it I could do nothing.

It also made me understand the importance of asking questions upfront, and to make sure when entering into a business relationship that everyone is clear on the deliverables and the time frame. It’s not only OK to ask questions to make sure these things are understood but professional too.

Lastly I realized that no matter what is going on within your business or personal life if it is affecting your relationships with your clients you should be upfront about it. Don’t let your clients come looking for you, and by doing so put them in an awkward situation of having to ask for something that they paid for and is rightfully theirs. It’s just not cool. And this is your job. It’s your responsibility to take care of those client relationships and be clear about what you can and cannot do.

Life happens, we all have unexpected health crises, deaths, scheduling issues, problems with equipment, and unexpected monkey wrenches come up. That’s life! But if these situations occur and are affecting your business and your client’s experience with you, be honest. Communication is key for not only good will between you and your clients but it takes care of your integrity in the long run.

How can you avoid this experience?

Thanks Meighan! I think that Meighan nailed it on the head with her three lessons learned.

The one I’d like to break down a little bit more is the concept of always having a contract. Contracts get a bad rap and most business owners assume that they have to be long and full of legal jargon to be valid. But they don’t!

A contract just needs two things:

• mutual agreement on exactly what the deal is
• exchange of something of value

And since 2000, federal law has made electronic contracts and e-signatures just as valid as pen, paper, and ink ones. Which means that you can form a valid contract over a series of emails or through a service like HelloSign.

What might this look like?

Meighan could have formed a legally binding electronic contract using the following email exchange:

Acquaintance:

It was lovely meeting with you today. I’m super excited to have you create some social media graphic templates for my blog.

Do you agree that we outlined the following?

• You’ll create templates for use on Facebook, Twitter, and Pinterest
• You’ll have two draft mock-ups for me within two weeks
• You’ll do up to two rounds of edits to the single mock-up that I select
• You’ll provide Photoshop files of the final templates within one week of my final approval of the templates
• I’ll pay you $250 up-front for this work and an additional $250 upon delivery of the files
• I’ll provide you examples of my existing blog graphics so they can have the same look and feel

If so, hit reply with a yes along with a PayPal invoice and I’ll get you paid.

Looking forward to working together!

Meighan

With her acquaintance replying something like:

Meighan:

Yes, that’s exactly what I thought we agreed on. Shooting over a PayPal invoice now. Please send over your existing graphics ASAP.

Acquaintance

(BTW…I have no idea what Meighan hired this woman to do, this is just an example.)

Now you’ll notice that this email exchange meets our two requirements:

• Meighan made an offer
• the Acquaintance accepted Meighan’s exact offer
• they agreed on an exchange of things of value: cash for digital files

And because of that, this is a valid legally binding electronic contract.

If you are the service provider, presenting a contract is going to help you look more professional. But if you are the client and you aren’t given a contract, then an email exchange can create your contract. And prevent you from paying someone and getting nothing.

Want to connect with Meighan? Meighan’s website is full of resources on crafting a social media strategy for your creative business. Or you can connect with her on Twitter.