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I was reading the list of the 12 conditions necessary to qualify under as a Business Service Provider (BSP) in California over at https://insight.ieeeusa.org/articles/california-bill-ab-5-threatens-consultants/, and one of the conditions caught my eye as being a rather capricious one:

  1. The BSP must have a written contract to work for the contracting company;

What exactly does this mean?

I'm a big fan of being legally allowed to have "verbal" contracts for most things (legally enforceable provided sufficient evidence exists on the details of the contract, e.g., through "verbal" communication over email), but this condition makes it appear like I must actually hire a lawyer to draft some officially-looking contract, with signature fields and all. (I guess the question here may also be on whether or not communication over email falls under "verbal" or "written" "contract" in this context?)

This condition sounds very fishy to me, as you're legally allowed to do most business transactions without a "written contract" otherwise. Would this condition be enforceable? Would it be void due to being too ambiguous on what "written contract" means? What rights I may have through other laws that this condition might violate? (Right of free association? Some other rights?)

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  • What makes you think that the onus of writing the contract is on you? Many employers will have their own lawyers drafting standard contracts for these purposes.
    – grovkin
    Commented Dec 24, 2019 at 3:24
  • @grovkin then you surely wouldn't get an exception! I don't think the company providing the contract was the intention here, quite the opposite, but it's a bit telling that you read it this way.
    – cnst
    Commented Dec 24, 2019 at 4:24
  • I don't see your point; contracts (verbal or written) protect both parties. And if you're a fan of verbal contracts with the "sufficient evidence" of emailed text, what's your point?
    – BlueDogRanch
    Commented Dec 24, 2019 at 4:37
  • "you're legally allowed to do most business transactions without a 'written contract' otherwise": Your information on this is about 340 years out of date.
    – Nate Eldredge
    Commented Dec 24, 2019 at 5:26
  • For California's version of the statute of frauds, see Civil Code section 1624, enacted 1872.
    – Nate Eldredge
    Commented Dec 24, 2019 at 5:29

1 Answer 1

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Yes

Verbal contracts are fine except when the law requires a written one - as it does here. Real estate contracts are also required to be in writing dating back to the Statute of Frauds in 1677.

“Written contract” doesn’t mean written by a lawyer - just that the fact and essential terms of the contract are written down somewhere. An email or text will qualify. “Work for me -$20/h” “Ok” is a written contract.

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  • Great short answer. Almost exactly what I was planning to write before I saw your answer.
    – ohwilleke
    Commented Dec 24, 2019 at 21:56
  • This is terrible tax advice re CA AB5, which is the intent of the OP's question.
    – smci
    Commented Jan 9, 2023 at 0:23

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