For many IT freelancers, one-person companies, and small tech suppliers, contracts are something you get to eventually.
The recruitment agency is keen, the client seems friendly, and the work needs to start yesterday.
So why stall things with legal formalities like paperwork?
Mistake 1: Forgetting that formalities are your friend
Well, taking the casual approach — and simply going without any written agreement — is the single biggest mistake.
Time and again, it's the absence of clear, written terms that lands IT services suppliers in expensive disputes, writes Marina Danielyan of law firm Gerrish Legal.
Mistake 2: Scope Creep
Most disagreements don't arise because the IT contractor failed to deliver. They arise because no one nailed down what was being offered, how much it would cost, and when payment was due.
Take scope creep, as an example.
A contractor agrees to build a website with five pages.
Halfway through the build, the client requests an online store, followed by a booking system.
Without a defined scope, the contractor faces an unenviable choice: do extra work for free, or push back and risk souring the relationship.
Mistake 3: Woolly Payment Terms
Then there are wobbly payment terms.
A client saying "we usually pay within 30 days" might sound harmless, but it isn't binding.
If the invoice languishes unpaid for 90 days, chasing it becomes a nightmare.
How to tell if you're exposed
For a small supplier with tight cash flow, those missing funds can mean missed tax payments or being unable to pay subcontractors.
In short, if scope and payment aren't clear in your contract, terms or letter of engagement, you're exposed.
When tech suppliers end up in court over scope/pay…
Courts don't like patching together half-formed agreements. If parties haven't written down key terms, judges are forced to reconstruct them from scraps of evidence — emails, text messages, the parties' behaviour.
That process is messy, unpredictable, and above all, expensive.
Can WhatsApp messages form a contract?
Recent cases confirm this in no uncertain terms.
In DAZN v Coupang, the court held that emails, calls and significantly, WhatsApp messages, created a binding contract. And that's even though the parties in this broadcasting dispute had planned to "formalise things later."
For contractors in IT, the warning is stark: if your comms look like a contract, they may be treated as one. If your comms don't contain the essentials, you may be left with no enforceable agreement at all.
While not having a contract and issues to do with 'scope' and 'payment' are the first, second, and third biggest contractual mistakes we see IT contractors make, respectively, several other contractual traps routinely trip up small tech suppliers.
Mistake 4: Intellectual Property
(IP): Who owns the code, design, or content you create? Without a clause, clients may assume they own it outright, leaving you with no rights to reuse your own work.
Mistake 5: Termination
Can the client walk away tomorrow with no notice? Unless a notice period is agreed, they just might. That means no financial buffer if work ends abruptly.
Mistake 6: Liability
If something goes wrong — a data breach, a system crash — are you on the hook for unlimited losses? A properly drafted liability clause caps your exposure, often to the value of the contract.
Mistake 7: Confidentiality
Handling client data without a confidentiality clause risks breaches, fines, or reputational damage if information leaks.
Each of these contractual areas may feel abstract —until something goes wrong. Then, they can become the difference between a manageable dispute and a potential financial disaster.
Ensure your contract is short, written, and clear…
The solution isn't complex.
Contractors and consultancies supplying tech services or products need short, written contracts that set the boundaries clearly.
Such agreements don't have to be long or written in intimidating legalese!
Can IT contractors get away with just a 2-page agreement?
A two-page agreement covering scope, fees, payment deadlines, IP ownership, liability, and termination rights will do far more to protect you than relying on good faith or informal WhatsApp chats.
Think of it like software testing.
Skipping contracts because "it'll probably be fine" is like shipping code without running checks — you might get away with it once or twice, but eventually the bugs will catch up with you.
A simple contractual checklist for contractors: 5 must-covers
Before you sign (or start work), use the below contractual checklist to make sure your contract answers these five questions:
- What exactly am I delivering?
- How much am I being paid, and when/on what payment terms?
- Who owns the work once it's done?
- What happens if either side wants to walk away?
- What's the limit of my liability if things go wrong?
If the contract doesn't answer all five, you don't have a safety net.
Contract? What contract?!
For IT contractors and other small tech suppliers, the biggest contractual mistake really is assuming you simply don't need a contract in the first place!
The friendly agent, or enthusiastic end-user, isn't the problem — it's the silence from them when invoices go unpaid, the vague "extras" that weren't agreed upon emerge, or the shock of your services being cut mid-project with no notice.
And finally, practice basic business hygiene in 2025-26…
Informal messages can hold things together temporarily, but they're no substitute for a contract that reflects the real deal. Your work is valuable, and protecting it with clear, written terms isn't overkill — it's basic business hygiene. Because if you don't write the rules, you may find yourself playing by someone else's — in court.
