Strengthen Trust. Put It In Writing!

 

Good old times! We could make “hand-shake” deals.

Some business people take pride in making “hand-shake” deals. Such deals, to them, are based on the “honor” system. Both sides are expected to honor their commitments as per the agreement. When the misunderstandings surface, they often are disappointed and surprised to learn that not all deals need to be written down to be legally binding.

Under the U.S. contract law, all that’s needed is an offer, acceptance, and consideration wrapped in the legal jargon for a benefit gained by each side. For many deals, this means that a handshake is enough to “bind” the parties.

Of course, if you end up in court, it is much easier to prove that a contract existed if it is written. Nevertheless, other kinds of evidence, such as witnesses to the deal, will often carry significant weight. If you do not document what was agreed, it can be a breeding ground for future disputes.

The U.S. statute of frauds requires that contracts for the sale of land, arrangements in which another party acts as the guarantor of another’s debt, contracts that cannot be performed within a year, and certain rarer kinds of deals must be in writing to be legally enforceable. It is not a good idea to get carried away by the perceived trust in a business or personal relationship. When in doubt, document the agreement in detail.

Learn how to negotiate like a diplomat, think on your feet, and master job offer and contract negotiations like a professional athlete when you buy and read my book, The World Is A Bazaar – Life Is A Negotiation. Buy here.

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