In business, even among family, a handshake deal can have disastrous consequences. Let me share a cautionary tale.
Meet Charles and James, brothers entangled in a real estate investment gone wrong. Charles lacked resources to purchase a property he deemed promising, so he turned to James, who provided a third of the funds. They shook hands on it.
Time passed, but no buyers emerged. Finally, an offer arrived, and James sought to cut his losses. Disagreement arose over dividing the proceeds, with James feeling entitled to additional compensation for Charles' alleged mishandling of taxes, and Charles adamant about honoring the original deal.
The dispute escalated, engaging attorneys and revealing shocking details: James had used the property as collateral for a business loan. The ensuing seven-year lawsuit drained both brothers' wealth, far exceeding the property's value and fracturing their relationship.
The bitter irony lies in the simple solution: a written agreement.
It's crucial to document terms and protect your relationships and financial well-being. Even among family…. No, especially among family, because you will never stop being family.