The Risks of Handshake Agreements: Why Getting it in Writing Matters

We often tell our clients, “Get it in writing.” Handshake agreements may feel convenient, but without written terms, they can lead to costly misunderstandings. Relying on a verbal agreement is risky because it often boils down to "he said, she said," making it difficult to prove the terms if things go south. When agreements are formalised with a contract, both sides benefit from clear, documented terms that can be reviewed, negotiated, and legally enforced if necessary.

Surprisingly, handshake agreements aren’t limited to informal or small-scale deals. Even sophisticated clients sometimes rely on verbal agreements, leading us to work retroactively to formalize the deal—a process that’s often complicated and risky. We’ve seen instances where clients end up in the Supreme Court, facing high legal fees, just to establish that a contract even existed. Without a written agreement, we’re left relying on behavior and other indirect evidence to argue the contract's terms, which can be a lengthy and expensive ordeal.

The lesson here? Save yourself the trouble and potential costs by getting it in writing from the start. Drafting a contract upfront clearly outlines everyone’s roles, obligations, and expectations, reducing the risk of disputes and saving valuable time and money. Whether for a small project or a high-stakes business venture, a well-structured contract is the best way to protect your interests and keep things on track.