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Is a Handshake Enough? Understanding Written and Oral Agreements


We see handshakes every day exchanged between strangers, acquaintances, business associates, politicians, world leaders, adversaries, and friends. It can convey different emotions or messages such as hospitality, respect, or congratulations. Many successful negotiations, whether they involve peace treaties, land deals or neighborhood wagers begin and end with a handshake. But in the business context, is a handshake enough to consummate a deal?

North Carolina Contract Law

In North Carolina, a contract may arise from either a written or oral agreement between parties. It can even be implied by the conduct of the parties or established practice in certain industries. However, under certain circumstances that fall within the statute of frauds, a contract must be in writing to be enforceable.

Such circumstances include:

  • A contract for the sale of goods for $500 or more,
  • A promise that cannot be performed within one year from the date of the agreement, or
  • Promises concerning the sale of real property.

In these situations, a handshake agreement may not be enforceable as all essential elements of the contract must be in writing.

When an Oral Agreement is Enforceable

If an agreement does not fall within the categories that require a written contract, an oral agreement may be enforceable even without a handshake. Over the centuries many agreements have been reached with a verbal exchange and handshake; promises fulfilled without incident leading to the next deal and the next deal after that.

It is not until there is a disagreement, misunderstanding, or perhaps changes of circumstance that individuals or businesses think about seeing an attorney regarding an unfulfilled agreement. Without a written contract, the terms of an agreement may be difficult to prove. Depending on the nature of the verbal communications, a party could contest essential terms or even the existence of an oral contract.

Agreements and Trust

We now come back to the handshake. A simple handshake can convey an atmosphere of cooperation and goodwill, in a word – trust. There are some that believe insisting on a contract in writing suggests a lack of trust. To those people, I would suggest drafting a written document memorializing the wishes and promises of each party to serve as a written handshake. It is an acknowledgement of your partner’s interests.

A request for a written document should not be borne out of mistrust, but rather an atmosphere of cooperation and goodwill. It should capture the true intentions of the parties, acknowledge concerns, and plan for contingencies that may affect the business, the individual and families in the future. Pieces of paper will never convey the warmth and friendship like the handshake from an old friend. However, a written contract may preserve that friendship and help create new ones.

If you need assistance with a written or oral agreement, please contact one of our business attorneys at (704) 892-1612