In Handshake Agreement: Understanding the Basics

The term “in handshake agreement” is often used to describe a verbal agreement or understanding between two parties without a written contract or agreement. While this may seem like an informal arrangement, it can be legally binding in certain circumstances. In this article, we`ll explore the basics of handshake agreements, their pros and cons, and how they can impact your business.

What is a Handshake Agreement?

A handshake agreement is a verbal agreement made between two parties, typically in a business or professional setting. These agreements may involve a variety of transactions, including sales, partnerships, collaborations, and employment agreements. They are often made casually, without the need for formal documentation, and are based on mutual trust and understanding between the parties involved.

In some cases, a handshake agreement can be legally binding. However, this is not always the case, and the validity of a handshake agreement will depend on a variety of factors, including the specific terms of the agreement, the intent of the parties, and the context in which the agreement was made.

Pros and Cons of Handshake Agreements

Handshake agreements can be beneficial in certain circumstances. For example, they can save time and money by eliminating the need for formal legal documentation. They can also be useful in situations where the parties involved have a long-standing relationship or mutual trust.

However, there are also risks associated with handshake agreements. One of the biggest risks is that they may not be legally enforceable, especially if there is a dispute between the parties. Without formal documentation, it can be difficult to prove the terms of the agreement or the intent of the parties involved.

Additionally, handshake agreements may not provide clear guidance or protection for either party in the event of a breach of contract or disagreement. This can lead to confusion, conflict, and even legal disputes, which can be costly and time-consuming to resolve.

How to Protect Yourself in a Handshake Agreement

If you do decide to enter into a handshake agreement, there are steps you can take to protect yourself and ensure that the agreement is legally binding. One of the most important steps is to clearly outline the terms of the agreement and the intent of both parties. This can be done through a written document, such as an email or letter, or through an oral agreement that is recorded or witnessed by a third party.

It`s also important to ensure that both parties have a clear understanding of the agreement and any potential risks or consequences. This may require seeking advice from legal or financial professionals before entering into the agreement.


Overall, handshake agreements can be a useful tool for businesses and professionals in certain circumstances. However, it`s important to understand the risks and limitations associated with these agreements and take steps to protect yourself and ensure that the agreement is legally binding. By doing so, you can avoid potential conflicts and legal disputes and build stronger, more productive relationships with your business partners and clients.