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Don’t just shake on it - write it down!

 Technology, automation and artificial intelligence (AI) seeks to cut out the very work that professional service advisors do.

By Law Squared

Last year, around this same time, I made a little wager with a friend (let’s call him ‘Ollie’, because that’s his name!) on the outcome of the AFL Grand Final - he was on the Adelaide bandwagon, while I was with the Tiger Army. By now, I imagine just about everyone knows what happened that day, especially if you’ve visited the suburb of Richmond since then (hint: Richmond won!).

Unfortunately, in making this wager, I made a crucial mistake - I sealed the deal over a handshake, and not in writing. While this shouldn’t have been an issue, let’s just say that Ollie knows how the push the boundaries.

As the final siren blew, and as those long-suffering Richmond supporters began screaming ‘YELLOW AND BLACK’ at the top of their lungs, I politely reminded my friend of our bet.

He simply smiled at me and said, ‘Prove it, mate!’.

While the moral of this story should be that I probably need new friends, it also teaches us a valuable lesson as to the importance of getting any deal - i.e. an agreement or contract - in writing.

Invariably, the most problematic agreements are those which are not committed to writing - i.e. a verbal agreement (sometimes known as a ‘handshake agreement’). While there may be certainty as to the key terms of the agreement (such as price), there is more likely than not going to be a lack of detail with respect to the terms which otherwise would be necessary to give ‘business efficacy’ to said agreement.

That is, while the parties may have agreed for the relevant goods/services to be delivered for price X by date Y, what else has been agreed upon? Has there been any discussion as to how the parties will manage any dispute? Does the matter go straight to Court, or does it first go to arbitration? If the agreement was in writing, then the parties would likely have seen fit to include a dispute resolution clause which would clearly provide for how such a dispute would be managed and resolved.

In this scenario, it is clear that by having a clearly articulated and defined agreement, considerable time, distress, effort and costs can be minimised, or avoided altogether.

We will always recommend, in the strongest possible terms, that any agreement (be it for $500 or $50,000) be clearly set out in writing. With that being said, we appreciate that sometimes doing so is less than ideal, especially when you are busy focusing on the day-to-day running of your business. Even when things are busy, the small amount of effort required to put something down in writing will almost always be well worth it.

You may find it hard to believe - because let’s face it, we aren’t generally the most popular sort of people - but having a lawyer put together a written contract will give you considerable peace of mind. Just as importantly, it could save you many, many dollars in the event that something goes wrong.

So this weekend, just keep in mind when you decide to bet your friend that Collingwood will beat West Coast in the Grand Final, make sure you get it in writing - they might just pay up!

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At Law Squared, we partner with passionate entrepreneurs and businesses who need our technical help and expertise in many areas. We’d love to have a chat with you, so feel free to drop us an email at hello@lawsquared.co.


 

Law Squared

hello@lawsquared.co

+61 9008 5954

 
 

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