Barter is an increasingly common form of collaboration between entrepreneurs, freelancers and influencers. Instead of money, parties exchange services or products – for example, advertising for accommodation, graphics for marketing or cosmetics for social media posts. Although barter collaboration looks informal and simple, it is legally a commitment like any other. If it is not contractually addressed, it can easily lead to disputes, disappointment and financial loss.
Barter cooperation is making a big comeback today. At a time when companies are looking for efficient marketing channels and entrepreneurs are trying to save costs, barter is the logical choice. Instead of money, you offer a product or service and receive a quid pro quo – such as promotion, content, access to a target audience or other professional work. Barter thus enables collaboration even where a traditional paid contract would not be realistic.
But this is why people often underestimate barter. It is concluded on a good word, through messages on Instagram or with one sentence in an email. But barter is not a friendly exchange without rules. Once the parties promise each other something and start delivering, a legal relationship is created that is governed by the Civil Code. If one party fails to deliver what it was supposed to, the other can seek damages, rescind the agreement, or even sue.
Barter cooperation can therefore be beneficial, but only if it is set up correctly. The contract here is not a formality; it is an insurance policy that barter will not become a source of conflict.
If you barter on a regular basis, or if it is a more valuable transaction, it pays to have a professionally drafted contract. At Affordable Lawyer, we can help you create one quickly and easily online.
Barter means an exchange of performance between two parties without monetary consideration. In other words: Instead of paying an invoice, you provide another service or product to the other party. A typical example is a barter between a company and an influencer. The company provides free cosmetics or a staycation, and the influencer in return creates a post or video promoting the brand.
But barter is also used in everyday business. A graphic designer can create a logo for a café and get catering for an event in return. A photographer will offer to shoot a hotel and get free accommodation. An attorney can provide a legal consultation and get marketing services in return. Such agreements are common, but often not captured in writing at all.
Legally, bartering is never “free.” Each party gets something and provides something. That is why it is not a gift or a favor, but a contractual relationship. If one party fails to provide its performance, it is in breach of contract just as if it were a paid collaboration.
A common misconception is that barter does not need a contract because it is not paid in money. In reality, barter cooperation is often even riskier because the value of the performance is often unclear and the parties’ expectations easily diverge. It is the contract that sets clear rules and prevents a good agreement from becoming a problem.
Have a tailored contract prepared by an Affordable Lawyer. We’ll make sure your barter agreement is enforceable and secure quickly, online and with clarity.
Yes, barter is perfectly legal and Czech law allows it. Although the Civil Code does not explicitly use the term “barter cooperation”, barter can be legally classified under several types of contracts. Most often, it is an exchange contract, where the parties exchange things or performances with each other. In some cases, barter can be akin to a contract for work – for example, when a graphic designer creates a website and receives advertising space in return.
Very often, however, barter is dealt with as a so-called unnamed contract under Section 1746 (2) of the Civil Code. This means that the parties can agree on the content of the cooperation according to their own needs, even if there is no precise contract type for it. This is flexible but also dangerous if the agreement is not clearly written.
The legal binding force of barter is the same as for a paid contract. Once the parties have agreed, obligations arise. If one party fails to fulfil the barter, the other can defend itself in court. The only difference is that the undelivered performance or its value is dealt with instead of the unpaid amount.
This is why it is important not to regard barter as an informal friendly exchange. From a legal point of view, it is a contractual relationship with all its consequences. And the more clearly it is regulated, the less risk of a dispute.
Barter collaborations often start very simply. Someone writes a report: “We’ll send you a product and you give us a story.” The other party replies, “Sure.” And that’s the end of it. But this simplicity is the main source of problems.
Imagine a situation: a company gives an influencer a stay worth 15,000 CZK. The influencer promises three posts and one video. The stay takes place, the influencer leaves, but the posts are never made. The company has no document to prove the specific commitment. The influencer claims it was just an “invitation” with no clear terms. The dispute is over.
Another common problem is the quality of performance. The entrepreneur expects a professional ad, but gets an illegible photo with one emoticon. Or a graphic designer delivers a logo, but the counterparty never uses it and refuses to provide the promised consideration.
Without a contract, it can be very difficult to prove what was agreed. Terms, scope of performance, penalties and rules for terminating the cooperation are missing. Barter then turns from a profitable tool into a source of frustration and financial loss.
This is why the contract is of crucial importance in barter cooperation. It helps set expectations, protects both parties and allows for enforcement if one party breaks the commitment.
Tip: How to set up a relationship with a service provider? Does signing a non-disclosure agreement (NDA) imply a lack of trust towards the other party? And what form of cooperation with a freelancer should be chosen so that it does not constitute a “shvarcsystem”? Find out in our article.
A good contract is the basic insurance of barter cooperation. It doesn’t have to be long or complicated, but it does need to be specific. The first step is always to identify the parties accurately – especially if the influencer or freelancer is acting as a self-employed person. The contract must clearly state who performs and who is liable for any damages.
It is crucial to describe the barter performance in detail. It is not enough to write “advertising on Instagram”. You need to specify how many deliverables will be created, on what platform, in what format and by what deadline. Similarly, what the company is providing must be described, whether it is a product, a service, a stay, or perhaps a long-term fulfilment.
Sanctions and penalties are also an important part of the contract. Many people avoid them because they see barter as a friendly cooperation. But penalties are often the only effective way to ensure that the other party actually fulfils its obligation.
The contract should also address copyright – for example, who can continue to use photos or video content. And also the possibility of withdrawal if the collaboration doesn’t work.
A properly drafted contract makes bartering a safe business tool, not a risky experiment.
If you want to be sure that your barter cooperation will be legally sound, you can contact us – we will prepare a tailor-made contract for you.
One of the most underestimated areas of barter is taxes. Many people feel that if the money doesn’t come into the account, there is nothing to tax. But that’s a mistake. The IRS looks at barter the same way as ordinary income, only it is not paid in cash, but in kind.
If an influencer receives a product or a stay, it is taxable income at the normal price. The same applies to a company that receives an advertising service. Both parties should record the value of the consideration and include it in the accounting or tax records.
For VAT payers, barter is even more complicated, as the exchange of supplies may also constitute a taxable supply for VAT purposes. In practice, this means that barter may also give rise to a tax liability.
It is therefore advisable that the contract also contains a valuation of the transaction or a clear statement of its value. Barter is not a “tax trick”, but a standard business relationship which also has tax consequences.
If you are not sure how to set up barter correctly, we recommend a consultation – it will save you the inconvenience of a possible audit.
Barter is a smart way to get services or marketing without direct costs. But at the same time, it is not an informal favour. It is a legally binding agreement that can have tax and contractual implications.
Without a contract, barter often ends in misunderstanding. One party delivers, the other doesn’t, and there is a lack of proof and the possibility of enforcement. A properly drafted contract is therefore not a waste, but a protection.
If you want to make sure your barter is safe, fair and enforceable, contact us. We will prepare a bespoke contract for you, quickly and professionally.
Tip: The Supreme Administrative Court has finally confirmed that some of Rohlik’s couriers worked in a shvarcsystem. See if you are not making the same mistake in your company.
Barter is an increasingly common form of exchanging services or products without money, used by entrepreneurs, freelancers and influencers, for example when a company provides a stay or goods in exchange for promotion or professional service. Although barter operates informally, it is legally a contractual relationship governed by the Civil Code, often as a contract of exchange, contract of work or unnamed contract under section 1746(2), and has the same legal binding force as a paid collaboration. The biggest risk of bartering is entering into a “good word” agreement, where there are no clear terms, conditions, scope of performance or penalties, which can lead to disputes, for example if the influencer fails to deliver the promised outputs or the counterparty refuses to provide the agreed consideration. Therefore, it is essential to contractually address barter – the contract must specifically describe the performance of both parties, identify the partners, set deadlines, address copyrights, the possibility of terminating the collaboration and any penalties. Taxes are also an important aspect, as barter is taxable income at the value of the normal price and VAT payers may be liable to pay tax. Barter is therefore a profitable business instrument, but only if it is legally correct, enforceable and protects both parties from unnecessary losses, so for more valuable or long-term collaborations it is worth contacting a lawyer and having a tailor-made contract prepared.
Yes, barter is a legally binding relationship and a contract significantly reduces the risk of litigation.
Barter is taxable income because you receive consideration in kind.
Without a contract it is hard to prove, with a contract you can claim compensation or penalty.
Yes, if it is a promotion of a product or service, it must be labelled as advertising.
For more valuable barter, long-term cooperation or if you want to be sure of enforceability.
We will draw up a contract for the work or check the existing one. This way you can be sure that the delivery of the work will be legally sound and free from ambiguity. We will resolve the matter quickly, no matter where you are from in the country. You can pay after the service has been provided.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
