In my time as a freelancer, I've done my fair share of finding people and organizations to work with. Not all potential partners have good intent, however, and I've had to file claims more than once. It's a major pain in the neck you definitely don't want to endure more than is necessary.
That said, the harsh reality about contracts, even ones that are beautifully, tightly written by the best legal experts, is that they really don't fully protect you from legal trouble. Someone who wants to breach and con is going to breach and con regardless of what you might put on paper, so the simple presence of the document is no guarantee everybody will behave. And it's not unusual for companies to drop cases when they're in the right simply because the cost of the fight exceeds the cost of what's owed. Scammers know that, and they milk it.
So if a contract isn't a guarantee against strife, how can you protect yourself from a bad arrangement? Here are my personal recommendations, based on my own experience.
1. Read reviews and get recommendations.
Should be common sense, right? But all too often, people don't do this because they're swept away by the excitement of the opportunity, feel compelled to move fast to compete or get suckered by the suave personality of the scammer. If a hiring manager gets references as a matter of standard, so should you.
2. Set up deposits and milestones.
Deposits show a good faith intent to move forward. Milestones allow you to get paid or make a payment when you reach a certain point in a project. If the relationship starts to go south, you won't be out everything.
3. Check the website and phone number.
Legitimate partners make it easy for others to find them because they've got nothing to hide. But because fake websites are so easy to create, you still have to verify that the url you're given isn't just a front. Dead giveaways are no postal address or other contact info (or excessive automation), poor grammar/spelling, no reviews, security logos that open to a picture rather than a new tab with security information and a domain that appears to have a very short life (good companies stick around!). Http:// can be legitimate, but https:// is safer. Make sure the information on the site and on any hard copy documents you're given match.
4. Don't tolerate a lack of correspondence.
Life admittedly happens, but if contact suddenly wanes and you get the feeling you're getting strung along, then unfortunately, you probably are. To avoid this, politely and tactfully make appointments for the next check in every time you talk, and ideally, hold those appointments in person. Always make sure you have more than one point of contact for the partner. This means having another living breathing person to go to, but it also means being able to use multiple platforms, such as chat or email.
5. Reiterate in writing.
When new terms or responsibilities come up, reiterate them to the potential partner in writing, such as "As of [date], I am to [task] by [due date] with [resources]." Have them sign this or respond in the email thread with a simple "Yes" or "I agree". This doesn't guarantee they won't try to wiggle out on the agreement, but it reduces the potential for any miscommunication and creates further verification outside of the contract about what the expectations and responsibilities are.
6. Check formal organizations.
Legitimate partners are willing to tell you if they're registered with the SEC or provide other documentation about their activities. They often offer this information readily on their website. But the Secretary of State also can tell you whether a company has registered properly, is in good standing and has filed annual reports (not all small businesses are required to do so). You just need to contact the office in the region the company supposedly is incorporated. Check the Better Business Bureau, as well.
7. Double up.
Bring another person to meetings. Have more than one person work on your books. You get the picture. The idea is, have a witness when you can, and don't hand all responsibility or accountability to one person, as that makes it easier to commit fraud without anyone noticing.
8. Use caution with credit.
Some less scrupulous people and groups earn trust by making lots of small payments. But then, they'll claim they need a huge amount of work as soon as possible and ask you to go ahead with the job before you've been paid. Then, of course, they skip out on you after you deliver. You can avoid this issue by being clear about the lead time you require, or by specifying payment in advance, in a written agreement.
9. Skip cash.
One word matters here--traceability. If a potential partner insists on cash, they're likely counting on the fact no one will be able to verify you paid or were paid. Checks and credit cards are better options.
10. Ask about their work.
Be suspicious if you're the only thing on someone's agenda, as that can indicate you're a target. But make sure they don't have so much happening that you're going to get pushed to the back burner or easily dropped, too. This is also the chance to review their resume and/or portfolio to see if their expertise actually fills in the gaps in your project.
11. Allow yourself time.
The more someone is pressuring you to make a decision now, now, now, the more likely it is that they're just trying to get your cash and run. Think honestly about how much time you need to review the company/person and consider their data, and then tell them directly what those needs are. Good partners want you to be sure of your decision and feel good about it, and great business relationships always are worth a wait.