Just as potential romantic partners are blind to the other’s faults at the outset of a romantic relationship, business people often consummate deals over handshakes, entering into arrangements blissful and starry-eyed. As a business attorney who people call when things go sour, I am sorry to say that handshakes aren’t usually enough when the initial luster of the new relationship fades. The basics of the deals should be documented in writing, whether this is referred to as a “contract,” “agreement,” or even a simple “letter.” Incidentally, as long as the terms are in a writing signed by both parties, these words are essentially interchangeable. A well written contract contains the rules for governance of the relationship: who does what when, for how much, and on what additional conditions.
I would much rather help people when they are about to enter into a deal, than later on when the deal goes bad. When things go smoothly, the document will be filed away and maybe even disregarded. A lawyer’s goal is to draft an agreement to protect parties when things don’t go as planned. Of course, if the business relationship is severed beyond repair, even invoking certain provisions of the document may sufficiently resolve the issues. In that case, attorneys may need to be summoned, demand letters drafted and exchanged, even litigation or other dispute resolution threatened or considered. A written agreement will likely provide the parties with much more assurance than a handshake deal based on trust and good intentions.
Tamara Pester, the principal lawyer at the Law Office of Tamara Pester, is a member of the Cherry Creek Chamber of Commerce and an attorney focusing on business contracts and trademark protection. For more relationship and contract advice, follow Tamara on Facebook, check out “Tamara’s Tips,” or contact her at firstname.lastname@example.org or (303) 385-8525!