Barter has been a part of our society for thousands of years. It is essentially the exchange of goods and services between two different parties, without any involvement of a monetary medium. While the ancient barter transactions were based on the word of mouth, today’s corporate barter exchange needs a highly efficient and non-partial agreement for the benefit of both parties.
A barter agreement generally spells out any and every information needed to make the deal as beneficial as possible, for both the parties. It will contain detailed and intricate information on what goods or services are being traded, on what conditions, and by whom. If services are being traded, the agreement will need an accurate record of the specific task, the time spent on it, and even the quality of the work done. While in the case of goods or products, all you need is a valid cost of the product and its quality to create an unbiased agreement.
Without a valid agreement between the trading parties, they are not obligated to keep their end of the bargain after they have availed the other party’s goods or services. This might encourage a fraudulent behavior. A proficient agreement also allows you have a better track of your taxes if the goods or services are in fact taxable.