How much is a handshake worth to your business?
When a client calls about a deal or a working relationship that has gone bad, the first thing we ask for is a copy of the written agreement. And many times there is no written agreement in place.
If you do not have a written contract it would be your word against the other party’s word in the event the dispute ends up in litigation. A contract in written form signed by both parties can be enforced much more easily than a handshake. Often times, an email acknowledged by both parties can be sufficient evidence of an enforceable agreement.
Business relationships need to be clearly documented. The scope of the work, the price to be paid, limitation of liability and any other special terms or conditions respecting the work need to be included. This gives you and the other party an opportunity to clarify and confirm precisely the scope of the work to be performed from the outset. Any misunderstandings or disagreements can be clarified through this process.
Time spent drafting and reviewing a contract will often pay off even if the project is small.
Moreover, if the other party refuses to sign a contract or to review its terms, this may be a warning sign and you should reconsider whether you want to work with someone who is unwilling to work with you.
And any significant changes to the contract should be in writing as well. At a minimum, send the other party a confirming email about a change or a particular conversation that impacts the contract and ask that he or she confirm by reply email.
A handshake cannot protect your business the same way a written contract can. It’s simply not worth much.