When two parties agree to a deal or a contract, it is common to seal the agreement with a handshake. This informal agreement is called a “shake hands agreement,” and while it may seem like a casual gesture, it can have significant legal implications.
In a shake hands agreement, the terms and conditions of the deal may not be explicitly stated in writing. Instead, both parties rely on mutual trust and understanding to fulfill their respective obligations. While this may work in some cases, it can also lead to misunderstandings and disagreements down the line.
One major issue with shake hands agreements is the lack of documentation. Without a written contract, it can be challenging to prove what was agreed upon in the first place. This can leave both parties vulnerable to misunderstandings and disputes.
Another issue with shake hands agreements is that they are not legally binding in many cases. Even if both parties shake hands and agree to a deal, if there is no written contract, there may be no legal recourse if one party fails to fulfill their obligations.
Despite these potential drawbacks, shake hands agreements can still be useful in certain circumstances. For example, in a situation where time is of the essence, and there is no opportunity to draft a written contract, a shake hands agreement may be the only option. Additionally, in some industries, such as real estate, a handshake may be considered a binding agreement, even without a written contract.
To avoid any potential issues with shake hands agreements, it is crucial to consider the details of the deal carefully. If possible, it is always best to put the terms and conditions in writing to avoid any misunderstandings down the line. Even a simple document outlining the key points of the agreement can be helpful in these situations.
In conclusion, while a shake hands agreement may seem like an easy and informal way to seal a deal, it is essential to consider the potential risks and drawbacks. Whenever possible, it is best to document the terms and conditions of any agreement in writing to ensure that both parties are on the same page. By doing so, both parties can move forward with confidence, knowing that their obligations are clearly defined and understood.