Ink It, Don't Sink It: Why Verbal Agreements Won't Protect Your Business
We've all heard it before: "Don't worry, I've been working with [Company] for years. They're the biggest [widget] producer in the state. They would never do anything to harm their reputation."
But here's the thing: relying on a handshake and a smile is a recipe for disaster. I've seen it happen.
Many businesspeople I know believe that contracts are optional, that they're just a formality. But let me tell you, they are essential.
Contracts are legally enforceable whether they're written or not, but proving a verbal agreement in court is always a he-said-she-said situation. You don't want to find yourself in that kind of mess.
Let's say [Company] gets bought out by a bigger company that wants to recoup its acquisition costs. They may stop doing everything they're not contractually obligated to do, and you're left high and dry.
Or what if the person you trust at [Company] leaves the company and is replaced by someone less trustworthy? Memories fade, and promises made during negotiations can be forgotten.
And what if that thing that one person was originally willing to do becomes more expensive?
The point is, anything can happen in business. And that's precisely why you need a written contract. It provides a framework for how to handle conflicts and disputes, and it gives you something to refer back to when questions arise.
So, if someone tells you that you don't need a written contract, insist on one. It's always better to be safe than sorry.
Get it in writing.