Common Excuses for Skipping Written Contracts (and why they fail)

The 3 most common excuses for not using written contracts are:

Excuse #1.‍ ‍I am often told “I don’t really need a formal, written contract because this person is a good friend”, or “we’ve worked with this vendor for a long time.”

Why this excuse fails: All transactions start out with trust between the parties (otherwise you should not be doing business together). If you want to remain good friends or colleagues, put the parties’ expectations in writing. That way it helps to avoid misunderstandings. As a previous litigator, I can attest that a lawsuit is often a friendship buster.

Excuse #2. “We don’t have enough time or money”.

This excuse also fails. It will cost a lot more time and money if a lawsuit is filed. Also, without written liability shifting provisions, the museum could be stuck with a giant bill if someone gets injured due to something a vendor did on the museum’s property.

Excuse #3. “The contract amount is small.”

The amount of liability to which a museum is exposed does not necessarily correlate to the dollar amount of the transaction. For example, a service provider (let’s say a pai nter) is hired and their fee is $3000. The vendor negligently leaves a slippery mess on the floor of the museum, and somebody slips and falls. If that person injures themselves, they would likely have a viable lawsuit against the owner of the facility, and lawsuits almost always cost much more than $3000. A written contract could protect the museum by including an indemnity provision, shifting any costs incurred from the lawsuit to the vendor whose mistake caused the injury.

The reality is that all transactions start with good intentions. However, without a written contract in place, it is more likely disputes will arise which can become very expensive, time-consuming and could even destroy personal and/or business relationships. Even informal arrangements, where no money is exchanged, can create great liability exposure.

Final Thought

Written contracts are not about mistrust. They are about clarity, consistency, and protection. For museums, they provide stability and continuity long after a project ends or staff changes.

If your museum regularly enters into transactions and desires to improve its contract practices, building a library of attorney-drafted contract templates can make a meaningful difference. This is the very reason that MuseumContracts.com was created.