The Need for Written Agreements


While it would be wonderful if business could be conducted on a hand-shake, the unfortunate reality is that informality can often lead to disputes. Putting all of your deals in writing, no matter how insignificant they may appear, makes good legal and business sense.

It is essential that the most important elements of any business transaction be committed to writing.  First, the business owner’s insistence on a written agreement lends credibility to the transaction.  Put frankly, customers are more likely to take you seriously if you require the execution of an agreement and, where practicable, a down payment, prior to the delivery of goods and/or services.

Having an executed agreement which specifies the nature and quantity of the goods and services to be delivered and the prices to be charged is much more likely to prevent disputes, as both parties are keenly aware that a written contract is usually enforceable.  It is not uncommon for a customer to refuse to pay for services because of a “misunderstanding” as to the nature and extent of the services to be provided. In  the event a dispute turns into a litigation, having a contract, with the terms of the deal spelled out, is an absolute necessity in one’s effort to obtain a prompt and successful outcome.

While you probably do not need an attorney to prepare all of your agreements, it is helpful to employ an attorney for the purpose of preparing a relatively simple, generic form of contract which can be used in most of your dealings.  Of course, the generic form will need to be adapted for different situations, but the contract can be prepared with this in mind.  In most cases, the business owner can adapt the form to each situation without the need to consult the attorney in every instance.  If you currently have agreements, invoices, purchase orders, and similar types of documents which you use in your business, it is helpful to have them reviewed periodically by an attorney.  Often, the agreements can be improved significantly without a great expenditure of time or money.  These documents may also need to be revised to meet changing circum- stances.

In summary, while changing your business practices to require written agree-ments in your business dealings may be initially troublesome, using them will save you the time, inconvenience and cost that will be incurred if a dispute arises. For a relatively modest cost, you can limit the occasions for litigation.

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