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Barter Agreement Basics

Not every contract involves money. Sometimes you might simply want to exchange goods or services with another party in a trade. In those instances, it's a smart idea to use a Barter Agreement to make sure everyone knows what their responsibilities are.

Use the Barter Agreement document if:

  • You want to trade goods or services with another party without using money
  • You or your company is trading goods or services for work done

Barter Agreements allow you to spell out exactly what is being traded and by whom. For services, you'll be able to note a specific task, job, or even hours spent working. For goods, you'll most likely want to include the quantity and conditions of the items in question.

While most people barter without an agreement, this can backfire down the line. On the one hand, like every contract, having the exchange on paper, signed by the parties involved, means everyone has to keep up their end of the bargain. But depending on your situation, items and services involved in a trade can in fact be taxable. For example, if you own a business and trade some of your stock to a contractor for work done, you're legally paying that contractor. Both parties should take care to include this trade on their yearly taxes. To do that, there's no better contract than a Barter Agreement.

Sample Barter Agreement

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