Business Agreements: Reduce it to Writing

April 26, 2016

I’m a relationship type of person. I prefer to deal with people I can trust. My word is my bond. I’d prefer to deal with others whose outlook and approach is the same, and whose word is their bond. Not to be cynical, but even if you are like me, don’t for a minute believe everyone else acts the same way. Folks, it’s a dog eat dog world out there!

I recommend that you reduce all business agreements to writing.

The writing can be short and sweet. You may be able to generate it yourself without retaining a law firm, and it doesn’t need to include all of the legal boilerplate.

But if the agreement or understanding relates to relates to how you plan to earn income and support yourself and your family, please reduce a business agreement between two or more people to writing. The basic terms and provisions should be written down and the document should be signed.

Why Get It in Writing?

  1. First and foremost, if one party “forgets” the terms and provisions of the agreement or understanding, you can “remind” him or her. This helps prevent “selective memory.”
  2. You can, if necessary, enforce your rights under the agreement if the terms and provisions are reduced to writing and signed. Once you have a signed agreement that you can use to enforce your rights, the other party might “come around” rather risk you asserting the agreement against him.
  3. I think it is particularly important that business agreements and understandings with friends or family members be reduced to writing. Why? I genuinely believe that “misunderstandings” can best be avoided, and important personal relationships preserved and maintained, by “putting it in writing.”

And a post script.

What do you do if you neglect to reduce a business agreement or understanding to writing, and you find the other party has no plans to observe the terms of your oral agreement?

It will be difficult, if not impossible, to prove the terms of an “agreement” and enforce it if you failed to reduce the agreement to writing.  In this situation, if a “misunderstanding” develops, just walk away. Walk away but in the future always remember to reduce business agreements and understandings to writing!

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