Finance:Handshake deal
From HandWiki
A handshake deal is a verbal commitment to a transaction.[1] For the deal or agreement to become binding, one must witness the deal take place; have a follow up email or some form of communication to the other party; have any correspondence or other documentation that could be used as "evidence" in court or other legal needs; and/or begin to perform to the agreements in the deal.[2]
Examples
[citation needed] Example 1:
- A owns a business, as does B.
- A wishes to make a merger with B.
- B agrees to the business merger by handshake deal.
- Six months later, A wishes to begin the merger, but B declines.
- B does not have to accept because the deal was not binding.
Example 2:
- A owns a business, as does B.
- A wishes to make merger with B.
- B agrees to the business merger by handshake deal.
- At the time C sees the Deal occur.
- Six months later, A wishes to begin the merger, but B declines
- Since C saw the handshake deal occur, it was binding and B must perform the merger.
Example 3:
- While in a bar together, A and B want to begin a business.
- On a napkin, they agree to share profits, 50/50.
- Some time later, A and B make a very successful business.
- A finds out that he was receiving 40% of profits while B was receiving 60% of profits.
- Since the deal was also written on a napkin, it became binding.
- In court, it was decided that A must be reimbursed by B for the total money A has been cheated out of.
See also
References
- ↑ Graham, Paul. "The Handshake Deal Protocol". website. http://ycombinator.com/hdp.html. Retrieved 1 November 2013.
- ↑ Thorpe, C. P.; Thorpe, Chris P.; Bailey, John C. L. (1999). Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements & Promises. Kogan Page Publishers. pp. 72. ISBN 978-0749428426. https://books.google.com/books?id=EKw3cYLg4yUC&dq. Retrieved 2013-11-04.
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