Abbey road and Air, or the LSO or the Rolling Stones or lawyers or accountants dont do things on gents agreement - so why should you.
Er, well, I cannot speak for the LSO, but very often, yes they do. If anything is critical like booking a stadium act or a large orchestra, or you are dealing with an unknown quantity and a great deal is at stake, then a cashier's cheque is all the contract you need. And of course, you can't do things like publishing and MCPS etc., without a written contract.
There is a big difference between a letter stating what you are going to do and when you are going to do it and a written contract that one has to read through and sign and counter-sign. Yes, we write letters and emails stating what we will do and when, but if I am to engineer a recording somewhere, a telephone call will do. At least, Narco, that's how you booked me the last time and I trusted you!
I hire lawyers without a contract. I hired a building company to build my new studio without a contract. People like film companies and agencies sometimes ask me if I need a contract or a deposit and I tell them no, I trust them. It is very hard to cheat someone who has just told you that he trusts you.
But back to Steve's problem here!
Steve happens to be a trusting soul and an all-round nice guy. He is very idealistic and wants to reform the World. And like all good reformers, he started with himself and the studio is a large part of that reform process. Along comes some idiot band that couldn't play their way out of a paper bag and bring along a 'mate' who fancies himself as a producer, although he has never ever done one thing as a music professional.
For some reason, these people abound in the music industry. They pretend to be this, that and the other, when in reality they are just the bottom feeders of society. That is why I talk to my customers are great length before they get to record even a note. Even for a two-day thrash, I want to know where they are coming from and who they really are. My product is my best advertisement and just one crap band can spoil all that, so I need to know that what comes out will carry a message of quality. So we talk and I listen, carefully.
That does not mean that I do not make mistakes. I make plenty, I just try not to repeat them. I have actually banned a producer-engineer from using our studio because he was not any good. He talked a very good talk, but he couldn't use a DAW, he couldn't edit, he didn't read music and so I asked him to please not come to us in future. He was just a guy with a mid-life crisis and there's no shortage of those!
Right now, Steve is feeling sullied and hurt. If I think back to my agency friend (who screwed us for a whole lot more) then I know exactly how he is feeling. It is very, very annoying and the worst part of it is that one is annoyed with oneself for allowing these people to do this.
I have no special advice and given Steve's previous career and his work in debt counselling, I very much doubt he needs any from me, other than, now you know what they smell like, so you will smell them out sooner the next time!