Handshake Deals Are Risky Business: Why Every Agreement Needs a Written Contract

The Problem with Handshake Agreements

Believe it or not, some business owners are still closing big deals on a handshake — and paying the price for it. Years ago, this may have worked. In smaller communities where everyone knew each other, trust and reputation were often enough to keep deals honest. You weren’t worried about someone skipping town or denying their end of the bargain.

But times have changed. Business is more mobile. Partnerships span cities, states, and even countries. If a deal falls apart today, the person who burned you might be out of reach tomorrow. And if it’s your word against theirs? You’re likely to lose — especially without a written agreement.

What Happens When a Deal Falls Apart?

Let’s say you had a verbal agreement for a $100,000 service contract. Work was completed, but payment never came. You assumed your understanding would hold up in court — but without a written contract, your case becomes much harder to prove.

Even if you have a written contract, any additional handshake deals or verbal modifications may not be enforceable. Tennessee contract law heavily favors the four corners of the written document. If it’s not in the contract, it’s not part of the deal — no matter what was “understood.”

The Real Cost of Not Getting It in Writing

Here’s a real-world example: A client of ours missed the deadline to file a breach of contract claim for a deal that had gone sideways. The original loss? Six figures. But because key terms weren’t in writing — and because they delayed legal action — their options became extremely limited. The strength of their case crumbled under procedural rules and lack of documentation.

The result? Little to no recourse. That kind of mistake could put a small business out of operation entirely.

Written Contracts Protect Everyone Involved

Having a written contract isn’t about distrust. It’s about clarity. A well-drafted contract:

• Defines responsibilities for both parties
• Clarifies payment terms, deadlines, and deliverables
• Reduces misunderstandings
• Strengthens your legal standing if things go wrong

It’s not enough to just jot down the basics. Your contract should be clear, comprehensive, and legally sound. That’s where having a contract attorney in Cleveland, TN comes in — to make sure your agreements are enforceable and tailored to your business needs.

Protect Your Business Before There’s a Problem

Don’t wait until after a dispute to call a lawyer. By then, it may be too late.

At The Law Office of Sheridan Randolph, we help Tennessee business owners draft contracts that stand up in court. Whether you’re working on a service agreement, real estate transaction, or business partnership, we’ll make sure the terms are rock-solid.

Let’s make sure your next big deal doesn’t leave you empty-handed. Contact us today.