Formal handshake deals are the new contracts?
A recent article in the Harvard Business Review actually argues that handshake deals should replace written contracts. “Relational contracts that rely on parties’ making choices in their mutual self-interest are nothing new, of course. The benefits of informal “handshake” deals have been studied and promoted over the decades…” HBR admits that the basic contract is not going away: “Some relationships, such as those involving the purchase of commodity products and services, are truly transactional and only need traditional contracts.” But some of these new ideas may be useful as small businesses work on building networks and relationships in today’s challenging marketplaces. If you are a small business person looking for cost-effective legal advice on contracts and negotiations, call Carolin Shining for unique approaches and one-on-one service: