Why Your Handshake Deal Isn't Good Enough: The Legal Risks of Verbal Agreements

It feels simple, easy, and built on trust: you and your business partner shake hands, agree on the basics, and get to work.

No paperwork. No problem... until there is one.

I've seen too many entrepreneurs learn the hard way that verbal agreements aren't enough to protect your vision, time, or money. If you're serious about building a sustainable business, your contracts can't live in your DMs.

The Problem with Handshake Deals

Handshake deals and verbal agreements may be legally recognised in some cases, but that doesn't mean they're strong. The lack of clarity around terms, responsibilities, timelines, and consequences makes enforcement tricky. If something goes sideways, you’re stuck in a "he said, she said" nightmare with no paper trail. Even with the best intentions, misunderstandings can ruin a great working relationship.

Why a Written Contract is a Must

A written contract is more than a formality. It's your blueprint for clarity, boundaries, and growth. It outlines:

• Exactly what services are being provided

• Payment terms and deadlines

• Timelines and deliverables

• Exit clauses and cancellation policies

• Intellectual property ownership

• Confidentiality

When it’s in writing, there’s no guessing. You’re protected, and so is the other party. Everyone knows the rules of the game, and that builds trust faster than any handshake.

But What About Trust? Trust is essential in business, but trust without structure is a liability. A contract doesn’t signal mistrust—it shows respect. It says: I value our work together so much that I want to make sure we’re both protected.

A Cautionary Tale (I’ve Seen It Too Many Times)

Someone agrees to a revenue split with a collaborator, or commits to a long-term partnership with nothing in writing. A few months in, the partner bails, keeps using shared assets, or starts a competing offer. With no written agreement, there’s very little recourse. You're left frustrated, confused, and financially exposed.

If you want your business to thrive, you need contracts that match your vision. The solution isn't fear—it's foresight. Legal protection is a form of energetic protection. It keeps you focused on your purpose, instead of spinning out in the chaos of preventable drama.

Want to make sure your business relationships are Legally Lit? Join me for my next free monthly Contracts Mastery call where we break down contract clauses, answer your burning questions, and help you take your power back in business. Comment MASTERY or sign up here to save your spot. Or if you're in need of support with transitioning your handshake deal to something more solid, book a free 15 minute consultation.