Lesson on Contracts Learned the Hard Way

At the end of October, a past client asked if I would help him run his new startup company, for which I wrote the business plan two years before. I liked and trusted my client, who had a non-working financial partner. My client and I met with the partner to get his blessing on my involvement, since he would be paying me.

We met in the financial partner's office, and they agreed to pay me a set amount each month. The financial partner said that, because I had worked with them in the past, he didn't see the need for me to develop a proposal and sign an agreement. I was told I would receive a check the first Friday of each month and either side could end the relationship for any reason.

Mistake No. 1: Never do anything for anyone without an agreement that lays out who is responsible for what, the time period for payment and penalties if payment isn't made in the period agreed upon. It was the first time I didn't have an agreement, but I trusted the people because I had gotten paid before with no problems. It took three weeks to get the first check. ...