MI–0017 Recorded September 8, 2026
Contracts are not always the best option.
Keep earning the relationship.
A contract can clarify today. It cannot predict tomorrow.
This is not a choice between having sensible rules and having no rules. The practical question is: what must be fixed in advance, and what should be allowed to change?
A written agreement can usefully settle the price, payment timing, ownership, confidentiality, access to accounts and who is responsible for what. Those terms can prevent misunderstandings and protect both sides.
Difficulties arise when the same agreement also tries to prescribe months or years of future work. The parties must then guess what the client, technology and market will require later.
For example: A twelve-month marketing agreement might require four articles, a newsletter and Facebook advertising every month. Six months later, the results may show that video is producing leads, the website needs technical work and the Facebook advertising is wasting money. The original activities were reasonable when the agreement was signed. Continuing them simply because they are contractual may now be bad for both sides.
Another example: A longer commitment may be entirely sensible if a provider must hire an employee or buy equipment specifically for one client. The contract protects that investment. But it does not follow that the same fixed term and fixed scope are useful for prepaid work that can be reviewed every month.
The imaginary “perfect contract” is clear, complete, fair and able to adapt to every future event. No real contract can do that because every agreement is written before the parties know exactly how the work and circumstances will develop. The goal is not to eliminate all uncertainty. It is to protect what genuinely needs protection without preventing sensible change.
Make the essential commitments clear. Leave changing work free to change.
Tradition is not a business case
Many companies use contracts because contracts are customary in their industry, their peers use them or an inherited process assumes that every client relationship requires one. A familiar convention can be a useful warning that risks may exist, but it is not a substitute for identifying those risks.
When Tim asked one business owner why the company required contracts, the answer was essentially, “We have always done it that way.” The owner found the alternative difficult even to imagine. That answer explained the history of the process, but not the business purpose it served.
“We have always done it that way” explains a habit. It does not justify it.
The critical question is not whether contracts are normal. It is whether this particular relationship needs this particular contract. What investment, capacity, ownership, confidentiality, regulatory duty or other risk requires protection? What clarity does the agreement create? What costs, rigidity, disputes or incentives does it introduce? Could a shorter commitment, standing terms, staged payment or easy exit solve the real problem more proportionately?
In more than fifteen years of operating this way, Tim reports no occasion on which the absence of a fixed-term client contract created a downside for Holistic Web Presence, and no client who expressed concern about it. That is meaningful evidence about this particular bounded, prepaid service model—not proof that every business can safely operate without contracts.
The Holistic Web Presence model
Tim’s digital-marketing agency does not require clients to sign individualized, fixed-term service agreements. The client pays at the beginning of the month. The agency works through that month. If the client does not pay for another month, the work stops.
There is no fixed term, termination argument or catalogue of promised monthly activities. Each month is a small, prepaid and self-contained decision.
This is not an absence of structure. It is a repeated relationship governed by payment, performance, communication, history, trust and continuing mutual choice.
A client is not retained because departure is difficult. The client is retained because staying continues to make sense.
No fixed-term contract does not mean no terms
Both Holistic Web Presence and Smart VA Staffing publish the standing terms and processes under which they do business while explicitly explaining that clients are not locked into conventional fixed-term contracts.
Those terms address matters that should remain stable. Holistic Web Presence explains monthly prepayment, how services end and the notice that helps prevent erroneous charges or misunderstandings. Smart VA Staffing explains monthly payment, notice when ending a virtual assistant’s employment, employment-related obligations and confidentiality.
Published terms and the parties’ conduct may themselves have legal significance, depending on their wording and the applicable law. The useful distinction is therefore not an absolute one between “a contract” and “no contract.” It is between standing ground rules that support the relationship and a client-specific fixed term and rigid schedule of future activities.
Keep the protections and processes that need to remain stable. Keep the work plan free to change.
This approach can also reduce operating overhead. Drafting, negotiating, tracking and administering a tailored agreement for every client consumes management time and, when the consequences justify it, legal-review expense. Reusable terms do not eliminate the need for careful drafting or periodic legal review, but they avoid repeating that work for every ordinary monthly engagement. Tim’s view is that the resulting savings help the businesses remain competitively priced; the size of that saving has not been independently measured here.
Changing work resists a fixed scope
A new client may initially need a website designed and built. Later work can shift to understanding visitor behavior, improving conversions, building search visibility, creating campaigns, developing social media or using video.
The client’s priorities change. Competitors change. Google changes. Platforms and technology change. A detailed long-term scope can turn yesterday’s sensible tactics into today’s contractual obligation.
By not documenting a fixed list of activities, the agency can continually redirect effort toward the work that creates the most value now.
Contract theory recognizes this underlying problem: not every future contingency can be anticipated and specified. That does not prove that written agreements are undesirable. It explains why perfect completeness is impossible. The 2016 Economic Sciences Prize recognized foundational work in this area.
Plan the work without pretending the plan is permanent
Flexibility does not mean that the client is left wondering what the agency is doing. Holistic Web Presence normally agrees goals and a working plan for the next one to three months during a conference call. The discussion is documented in notes and summarized so that the client and agency understand the immediate priorities, responsibilities and intended deliverables.
A six-month direction may also be discussed, but it is deliberately looser. In digital marketing, six months is enough time for technology, search platforms, competitors, client priorities and the evidence from current campaigns to change materially.
The short-term plan is a current best judgment, not a promise to ignore new information. The agency might agree to create a particular kind of content, begin a social-media campaign or run paid advertising, then measure the response and redirect effort according to what actually performs. Activities that work can be expanded. Activities that do not work can be changed or stopped.
Accountability also runs in both directions. The agency identifies what it will do and what it needs from the client. A product campaign may depend on the client supplying descriptions, photographs or other marketing material. A service campaign may require accurate service details, examples and images. If those inputs arrive late, the dependent work moves with them. Clear notes make both the agency’s commitments and the client’s dependencies visible.
Define the next goals, deliverables and dependencies clearly—then let measured results change the plan.
A rigid annual scope would fit this work only if the services were standardized enough to be repeated regardless of results. For a tailored service, refusing to change course can be the opposite of accountability: it completes the promised activity while ignoring whether the activity is still useful.
Easy exit can create useful discipline
When cancellation is easy, the provider cannot rely on contractual friction to conceal poor performance, postpone a difficult conversation or take the client for granted.
The agency must keep producing useful results, explain what it is doing, adapt to the client and make its value visible. Continued participation then becomes more meaningful evidence of satisfaction because staying remains a real choice.
Tim reports average client retention of roughly nine years, many relationships exceeding ten years and five exceeding fifteen years. He contrasts this with agency peers who use fixed commitments and report retention closer to eighteen months.
Those figures are compelling experience, not a controlled experiment. Different client selection, service quality, pricing and measurement could also explain the difference. What the experience does demonstrate is that contractual lock-in is not necessary for exceptionally long client relationships.
The renewal paradox
Not every contract has an end date. Evergreen agreements and automatic renewals exist. But every fixed-term contract creates a renewal cliff.
It may prevent churn during the committed period while scheduling a date on which the client is invited to review the relationship, request proposals, compare competitors, renegotiate or leave.
A fixed contract can preserve a client temporarily while scheduling the day the client reconsiders you.
An indefinite monthly relationship does the reverse. The client is free to stop every month, but no artificial expiry date instructs the client to reconsider.
The promise surface
A detailed contract creates express promises against which conduct can be measured. Every specified deliverable, deadline, method, approval, report and performance measure becomes another proposition one party can claim the other failed to satisfy.
This is the promise surface: the number of documented points capable of becoming an allegation of breach.
A well-written contract may reduce disagreement by clarifying what the parties meant. But “well written” is not an objective guarantee. A clause can be legally precise but operationally wrong, appropriate when signed but obsolete later, protective in one circumstance and harmful in another, or clear alone but contradictory when combined with other provisions.
Additional drafting can close one ambiguity while creating complexity and new interactions. Careful drafting reduces some risks. It cannot abolish uncertainty.
Exit can replace enforcement
In Tim’s prepaid monthly model, there is no long future term to terminate, no detailed activity list to audit word by word and ordinarily no unpaid balance accumulating behind the relationship.
If the client dislikes the results or believes expectations were not met, the normal remedy is practical rather than legal: do not buy another month. The agency can likewise stop before supplying another month.
This can reduce both the number and financial value of possible breach disputes. It does not mean there is literally nothing to litigate. An oral or implied agreement may still exist, and claims could concern payment, past performance, misrepresentation, negligence, intellectual property, privacy, account access or damage to client assets.
When litigation becomes a business opportunity
Some claims are pursued because the expected recovery or negotiating leverage appears greater than the expected cost—not because the claimant is deeply concerned about the practical failure underneath the claim.
Private motives are difficult to measure, and public records cannot tell us what proportion of ordinary contract litigation is driven principally by that calculation. But the mechanism is observable. The U.S. Government Accountability Office documented patent-monetization entities that acquire legal rights to assert them for profit, and found that asymmetric litigation costs can create leverage for financial settlements.
Patent litigation is not contract litigation. It nevertheless demonstrates the economic principle: a legally actionable right can become a commercial asset independently of how much the claimant relied upon or cared about the underlying performance.
When written contracts remain valuable
A longer or more formal agreement may be justified when one party makes a substantial upfront investment, reserves scarce capacity, hires people, purchases equipment, incurs major third-party costs or needs enough time for results to become measurable.
Written terms can also be important for ownership, confidentiality, regulated data, privacy and security duties, authority to publish or change assets, liability, account access and orderly transition.
The lesson is not “never use contracts.” It is to identify which promises genuinely require legal enforcement and which merely freeze adaptive work or make departure difficult.
Do not contractually freeze work whose value depends on changing.
The relationship analogy—and its limit
The same lens raises a psychological question about marriage: can formal security sometimes feel like permission to stop earning the relationship?
That is a useful question, not a demographic conclusion. Marriage also creates commitment, legal protection, coordination and security that may encourage people to invest more deeply. Available U.S. evidence does not support the claim that unmarried cohabiting couples generally remain together longer than married couples.
The broader principle is that formal commitment and continuing effort perform different jobs. A durable relationship may need both security and the daily habits that keep each person choosing it.
A practical decision test
- Begin without assuming that industry custom has already answered the question.
- Identify the risks that genuinely require enforceable promises.
- Ask whether the work can be specified sensibly beyond the next short period.
- Protect any substantial upfront investment proportionately.
- Keep the commitment and unpaid exposure as small as the work permits.
- Separate standing protections from a rigid list of future activities.
- Define near-term goals, responsibilities and client dependencies without treating the plan as permanent.
- Decide in advance how measured results can change the next month’s work.
- Check whether a fixed expiry creates a useful review or an unnecessary churn event.
- Reduce promises that exist mainly to create exit friction.
- Make performance and value visible enough that the other party chooses to continue.
Tim Barrie · Independent application of established contract and incentive concepts
Where this insight comes from
Tim developed the insight while operating Holistic Web Presence without individualized fixed-term client service agreements. Holistic Web Presence and Smart VA Staffing publish standing terms and operating expectations, while ordinary services remain monthly and clients are not retained through long contractual lock-in.
Holistic Web Presence’s work changes continually. The agency documents short working plans, assigns responsibilities to itself and the client, measures results and changes tactics as the evidence and market evolve.
The agency’s unusually long client relationships led him to question the assumption that contractual lock-in creates retention. He later extended the idea to adaptive scope, artificial renewal events, incomplete drafting and the litigation opportunities created by a larger promise surface.