Bartering is the act of trading goods and services for something of value in lieu of money. While it is generally thought of as an extreme, alternative form of payment, it may be an idea that is going to become a reality amid the recent coronavirus outbreak.
The ongoing COVID-19 pandemic places business owners in a position where they need to get creative in generating income. Bartering is one strategy worth considering.
However, small business owners should understand that having the right bartering agreement in place is critical to ensuring a documented transaction is available in case a conflict arises later. The information about bartering agreements below is informational in nature, and questions should be discussed with a Florida contract attorney for specific legal advice.
What Is a Barter Agreement?
Not all transactions require an exchange of money for something of value you, like goods and services. A barter agreement is a type of contract that sets forth the terms and conditions of a transaction involving a trade, including the value of the deal and to whom it is being traded.
A Florida contract attorney can draft a barter agreement for the following situations:
- Exchange of services: A barter agreement for the exchange of services will specify the tasks to be performed, manner of service, and a deliverable deadline.
- Exchange of goods: A barter agreement for the exchange of goods will specify the quality and quantity of the relevant items.
Both parties engaged in the transaction sign the barter agreement to make it legally binding. Doing so holds everyone to the terms and conditions, as described in the contract. Business owners can use it in case a legal dispute arises later instead of arguing against a handshake agreement.
What to Include in a Barter Agreement
Like all contracts, a barter agreement must include specific information and provisions for it to be legally binding. It is essential to provide the guidance necessary that both parties understand and agree to collectively.
At a minimum, a barter agreement should contain the following:
- Legal names of both parties and business
- A description of the goods or services
- Terms and conditions to establish fair market value (FMV)
- Dates by which the exchange must take place
- An acknowledgment of the monetary value for tax purposes
- A termination clause
- Breach of contract terms
- Signature and date lines
A contract lawyer can facilitate the drafting of a barter agreement after the initial case intake. He or she may recommend that small business owners sign the contract before a notary public for additional durability. Typically, law firms have notaries on staff, so the review and signing may be done at the office.
Contact Boyer Law Firm, P.L. to Draft Your Barter Agreement
If you are considering barter agreements as part of your business during the COVID-19 outbreak, you should reach out to a Florida business law attorney at Boyer Law Firm, P.L. We can review your current business situation and provide additional recommendations to strengthen your company’s stability on a solid legal foothold.