I think naturally, as women, we hold the words of others to a much higher standard. Most of us would like to believe the best in people. And that if we go into a business relationship of any kind, they’ll play fair and keep to their end of the bargain. After all, you want to do business with people you like and trust. Unfortunately, life isn’t always like that. People you once got along with famously suddenly turn leaving you wondering what the heck happened.
Which is why going into any business relationship be it a joint marketing, strategic alliance, or even a supplier/client relationship without some form of written agreement should be considered a risk. I’m not saying it’s always going to bite you, but you leave yourself open to the interpretation of others.
Naturally, it’s up to you to evaluate the risk. But I’d strongly suggest you ask yourself what would happen should things go south. Are you leaving yourself open to nasty, relationship-ending disputes or even costly litigation?
Now I should point out that verbal agreements are considered to be valid legal contracts. But words are open to interpretation. Witnesses, even if you have any, may forget what was said. Even meeting minutes won’t suffice. It then becomes a case of he said, she said. And should this go to arbitration or court, believe me the person with the best documentation will prevail.
Movie mogul Samuel Goldwyn once said, “A verbal contract isn’t worth the paper it was written on.”
A written agreement is the only way to ensure that all parties involved in a business relationship know what’s expected of them and the consequences of failing to uphold their end of the deal.
Ask yourself the following:
– Will your business be put at risk if the other party doesn’t follow through on their agreement?
– Is there a chance the other party won’t hold up their end of the deal if circumstances change?
– Is there a possibility that the parties may remember the verbal agreement differently?
– Will your business relationship be adversely affected if parties interpret the agreement in an alternate way?
Put another way, the Australian divorce rate hovers around 50%. Couples who at one point were probably starry eyed, had children, thought they’d spend their lives together, now can’t stand the sight of each other and slug it out in court. While business relationships generally aren’t quite at that level, the stakes can be equally high. Parties that went in with high hopes, now find themselves in dispute.
So you owe it to yourself, your family and your business to protect yourself. Get well written contracts in place today!
How? Start by downloading our free SME contract checklist. It’s your quick guide to getting your contracts in place today!
Forewarned is forearmed. A well written contract is not expensive to produce. Especially when compared with the cost of litigation.