People have been using handshakes to solidify deals since at least as far back as ancient Roman times. A handshake in those days would show that each person was unarmed, thereby establishing a relationship of honesty and trust.
Fast forward to today with the progression of law and contracts, a need for more formalized agreements between parties has become much more common. However, in rural communities, many deals are still made through a verbal agreement and handshake.
In this episode of Mind Your Farm Business, David Kozicki, a lawyer with MLT Aikins and RealAgriculture’s Shaun Haney, discuss the legalities of handshake deals, when a more formal contract might be necessary, and everything in between.
Kozicki says anytime a person enters into a contractual relationship, there needs to be a level of trust, as contracts often fall apart due to changing circumstances or just not knowing the full extent of what both sides are trying to accomplish. There are a lot of factors to take into consideration when deciding how formal a contract needs to be, and even what makes a contract.
In the long run, Kozicki does not believe that the decision to formalize a contract needs to be a handshake versus a contract, instead “they can go hand in hand, you know, we can agree on something, handshake, deal on it, and follow it up with some sort of paper.”
Disclaimer: Royal Bank of Canada and its subsidiaries are not responsible for the information provided in this podcast, and this information does not necessarily reflect the views of Royal Bank of Canada or any of its subsidiaries. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its subsidiaries.
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