Transparency and doing business in a business-like manner are still important even between sole proprietors whose proverbial castles are still in the air. A freelance copywriter described getting burned by the owner of a new kitchen design showroom that will launch in the Emeryville/Oakland area next year:
"I had already been working on the project for awhile and it was extremely clear that Hugh Vanho had already hired me and that he was supposed to pay me $200. We had a meeting to finalize the formalities: Collect a $100 retainer check, sign a brief contract and revisit the material that we had already discussed over the phone. However, when I arrived Hugh said that he didn't bring a check and that he's interviewing other people, and he wants me to give him my completed projected so that he can compare it to the other candidates' completed projects and choose one, and then pay for just that one. I politely excused myself and walked away."
If the two had studied Business Law than the copywriter would have stopped working on the project and requested a contract much earlier, and if Vanho refused than the project would be over. With that said, solo business owners tend to operate on Good Faith instead of written contracts. If Vanho requested the work over the phone than it means that he hired her. If she performed the work (substantial performance) than he has to pay her for it. However, in this scenario Vanho waited until after the services were rendered to inform her that she wasn't hired, at at the same time he asked her to give him her work that she had already performed. She has a case for small claims court. Unfortunately she will have to pay for the court filing fee and she'll have to pay a process server to put Vanho on notice, which is the reason why most small disputes like this never go to court.