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I guess what you're really forfeiting is any type of warranty, recourse, and assuming all of the liability when paying a contractor under the table.
Personally, when the contractor I paid to build my fence said "want to pay cash", I jumped at the chance. When the road crew came by and said "we have extra ashvault, if you have $500, we'll do your driveway", I said "yes please and here is a case of beer if you toss in a load of gravel underneath".
But, these are both small things that even if I had a warrenty could either be easily repaired by me personally, or not repaired at all.
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