A handshake agreement, also known as a verbal agreement, is a deal between two parties that is made orally and sealed with a simple handshake. While these agreements are not legally binding, they are often used in business transactions and interpersonal relationships.
The practice of handshake agreements dates back to ancient times, where people would shake hands to show their agreement to terms. Today, they are often used in situations where a written agreement may not be necessary or is not practical.
One common example of a handshake agreement is between friends or family members who loan money to one another. Rather than going through formal loan processes, they may agree upon terms and seal the deal with a simple handshake.
However, while handshake agreements may seem simple and convenient, they can also cause issues if not handled properly. Since they are not legally binding, it can be difficult to enforce them if one party decides to back out or violate an agreed-upon term.
Additionally, misunderstandings can arise if both parties do not have a clear understanding of the terms and conditions of the agreement. This can lead to disputes and damaged relationships.
So, how can you protect yourself if you choose to enter into a handshake agreement? First, it is always recommended to have a written contract if possible, even if it is not legally binding. This will help clarify the terms and expectations of both parties and avoid misunderstandings.
If a written contract is not possible, it’s important to have witnesses present during the handshake agreement. This can include a third-party mediator or a mutual friend who can serve as a witness to the deal.
Overall, while handshake agreements can be a convenient and informal way to make deals, it’s important to approach them with caution. By taking the necessary steps to protect yourself, you can ensure that your handshake agreement goes smoothly and without any negative consequences.