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  • Writer's pictureAndrew Brodkin

Get It In Writing: The Importance of Written Agreements for Small Business

Updated: Dec 11, 2023

Why Written Agreements for Small Business Matter

One common mistake that many small business owners make is entering into verbal agreements with partners, contractors, or employees without getting anything in writing. While a handshake or a verbal "yes" may feel sufficient in the moment, it can lead to misunderstandings and disputes down the line.

The Risks of Verbal Agreements

Verbal agreements are not only hard to prove but also leave room for interpretation, which can result in conflicts. Imagine agreeing to a payment schedule with a contractor but later finding out that both parties have different understandings of the "schedule." Or consider the issues that can arise when you enter into a business partnership based on a verbal agreement, only to later disagree on profit-sharing or decision-making responsibilities.

The Benefits of Written Agreements

Even if you can't consult an attorney for every contract—which is always the recommended approach—having the terms of your agreement in writing is crucial. This doesn't necessarily mean drafting a formal contract; even an email outlining the terms and conditions, followed by consent from both parties, can serve as a written agreement. Here's why:

-Clarity: Written agreements clearly outline the scope of work, payment terms, and termination rights, leaving no room for ambiguity.

-Accountability: With everything in writing, both parties are more likely to fulfill their end of the bargain.

-Legal Protection: In case of a dispute, a written agreement can serve as evidence, making it easier to resolve issues legally.

Final Thoughts

In the world of business, it's always better to be safe than sorry. Whether you're working with partners, contractors, or employees, always get the terms of your agreements in writing. It not only protects your interests but also fosters a transparent and accountable work environment.

Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as legal advice. For legal advice tailored to your specific situation, please consult a qualified attorney.

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