Originally Published in Asian Avenue Magazine, November 2025
Trust Is Essential, But So Is a Contract
Trust is the foundation of any successful partnership. Whether you’re working with an advisor, investor, or co-founder, trust feels like the glue that holds everything together. But here’s the truth: trust alone isn’t enough. A strong legal framework doesn’t replace trust, it reinforces it. Let’s explore why written agreements matter and how they protect relationships.
Why Handshake Deals Are Risky
Handshake deals feel friendly and efficient, but they’re hard to enforce. Without a written contract, proving terms becomes nearly impossible – Courts rely on documentation, not memory. Even if both parties agree on the basics, details like timelines, payment terms, and responsibilities often get lost in translation.
The Risk
Verbal agreements leave room for interpretation. If expectations differ, even slightly, disputes can arise. For example, one partner might assume profits are split evenly, while the other expects a larger share due to their investment. Without a contract, resolving this disagreement could involve litigation, strained relationships, and thousands in legal fees.
Handshake deals also fail to address critical issues like intellectual property ownership, exit strategies, and confidentiality. These omissions can create long-term vulnerabilities that surface only when the partnership faces stress or change.
Key Elements to Consider
- Clarity of Roles: Contracts outline responsibilities so everyone knows what’s expected.
- Dispute Resolution: Mediation or arbitration clauses can prevent conflicts from spiraling.
- Confidentiality: Protect sensitive information with clear non-disclosure terms.
- Exit Strategy: Define what happens if someone wants out, before emotions run high.
The Bottom Line
Legal clarity helps ensure your business thrives without unnecessary drama
Partnerships should empower growth, not create uncertainty. Every business has unique needs, so avoid one-size-fits-all solutions. Tailor your agreements to reflect your goals and revisit them as your company changes. A proactive approach today can prevent disputes tomorrow and keep your business on track for success.
