When it comes to business agreements, it is crucial to have everything in writing to ensure clarity and accountability. However, what happens when both parties have verbally agreed upon something, but it hasn`t been put into writing? This is where a pre-agreed agreement comes in.
A pre-agreed agreement is a document that outlines the terms and conditions of a verbal agreement made between two parties. It serves as a written confirmation of the agreement, ensuring that both parties understand what was agreed upon, and it can be used as evidence in the event of a dispute.
Without a pre-agreed agreement, there is a risk of miscommunication or misunderstanding between the parties, which can lead to complications down the road. For example, if one party has a different understanding of what was agreed upon, it can lead to a dispute that may harm the business relationship.
By having a pre-agreed agreement, both parties can ensure that their interests are protected, and there is no room for misinterpretation. The agreement should include all key terms and conditions, such as payment terms, deliverables, timelines, and other critical information.
It is essential to note that a pre-agreed agreement is not legally binding and may not hold up in court. However, it can serve as evidence of the agreement between the parties and can be used in negotiations or mediation.
When drafting a pre-agreed agreement, ensure that it is clear and concise, and both parties have a copy. It is also essential to ensure that both parties have understood the agreement before signing it.
In conclusion, a pre-agreed agreement is an essential document in business dealings, especially when verbal agreements are made. It provides clarity, accountability, and serves as evidence of the agreement between the parties. Ensure that you have a written confirmation of any verbal agreements to avoid complications down the road.