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There’s No Such Thing as a Gentleman’s Agreement – Put it Down in Writing!

There's No Such Thing as a Gentleman's Agreement - Put it Down in Writing!

A verbal contract isn’t worth the paper it’s written on”

Sam Goldwyn


A contract does not need to be a written document. In the U.K, contracts can be and often are formed verbally. You may hear lawyers mention the technical ingredients of “offer, acceptance and consideration.” What this means in practice is that many business transactions take place without a formal written contract being in place, but there is often a contract anyway.

In this short programme, you can find out:

How having a written contract can benefit your business.

Steps you can take if you don’t have the resources to use a lawyer.

 

Programme transcript (headings added)

1. Why have a Written Contract

You may have heard about a gentleman’s agreement, where, in the beginning everyone’s probably getting on really well and is excited about working together.  Why bother with a contract?  Everyone’s friends. Just shake on it.

Well, when things go wrong, you’ll find that there are no gentlemen and there’s no agreement.

Advantage of a written contract – opportunity to set out key terms

The beauty of having a written contract is both parties have a signed record of what’s been agreed.  For example, most businesses aim to succeed financially – so it’s good to know when and how payments will be made.  A good contract will deal with most of the key terms and other issues that might crop up. 

The perils of unwritten contracts

Contracts don’t have to be in writing. They can be made verbally. The problem is that the terms will be uncertain and the contract will probably be incomplete.  Everyone who got on so well at the beginning,  may now disagree as to what was agreed, and this can be for all sorts of reasons ranging from flawed memories to being intentionally underhand. 

Value of written records

Where this happens, e-mails or letters can be helpful as evidence of what had been agreed.

Options where you and the other side disagree

At the end of the day though, where a disagreement crops up, the parties have three options:

Option One

The best is for them to try and reach an amicable solution; perhaps with the help of a professional mediator.

Option Two

Or they can let a court decide. This route can be expensive, time-consuming  and stressful without certainty of the outcome. 

Option Three

Or, finally, one party may decide to walk away  and learn for the future.

2. Simple Steps you can take

Always have a written record

It is always advisable to have a clear written record of what’s been agreed, 

A professionally drawn-up, tailored contract is best

In an ideal world, of course it makes sense to have a contract professionally drawn up by a lawyer.

If you cannot afford professional advice, try a DIY contract

That’s  (ie a professionally drawn up contract) not always practical or possible – not everyone has the resources to hand. The next best thing is what I call a DIY contract and this can be simpler than you think. 

It won’t be perfect because there are some technical legal points that a lawyer would include. 

What you can do though is record how you have agreed to do business together.

It can help to think of the contract as a project management tool,  set out each parties roles and responsibilities (who is doing what and by when) and make sure that everything that has been agreed or highlighted as a concern is recorded in writing. Brainstorm and agree this with the other side and ensure that it is signed off, even if this is by an exchange of e-mails. 

This should help you move forward smoothly and avoid any unnecessary disputes and it is a relatively simple step you can take yourself. 

#LittleGem

There’s no such thing as a gentleman’s agreement – put it down in writing!

Programme Ends

If you are interested in learning how to write you own contracts, I am holding a workshop “DIY Contracts – Simple Steps you can take to write your own Basic Contracts” on Thursday March 15th (evening) and Tuesday March 27th (morning) in Central London.

I hope that you found this useful. Please share it on Twitter or Facebook if you have!

Love,

Lubna

Please Note

I am a former lawyer using my legal knowledge and skills to make programmes and deliver workshops with the aim of transferring this knowledge in a user-friendly and accessible way. Neither the programme nor the accompanying notes are a substitute for applied legal advice.  



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1 Comment to There’s No Such Thing as a Gentleman’s Agreement – Put it Down in Writing!

  1. Liam O'Brannigain

    Very good, concise advice. I’ve been at the opening end of business, where everyone’s in love, and seen the results of a years hard trading and stress. If it all turns sour, nobody is friends and few are honourable. The proverbial sinking ship. What’s also to watch for is everything going really well, and some glory-hunter trying to get rid of you to take over for all the fees, kudos etc. So in bad and in good times you need a contract.

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