What Is a Friendly Agreement

When it comes to business dealings, it`s important to have clear and concise agreements in place. Sometimes, however, a more informal approach may be taken, and a “friendly agreement” may be used instead. But what exactly is a friendly agreement, and how does it differ from a formal agreement?

Simply put, a friendly agreement is a non-binding verbal or written agreement made between parties who trust and respect each other. It`s often used when the stakes are low or when the parties involved have a pre-existing relationship. Unlike a formal agreement, a friendly agreement is not legally enforceable, and there may not be any consequences for breaking it.

Despite not being legally binding, friendly agreements can still hold value. They can serve as a starting point for future negotiations or help build trust between parties. They can also be useful for establishing expectations and avoiding misunderstandings.

One common example of a friendly agreement is a handshake deal. This is when two parties agree to a deal by shaking hands, without any formal contract or written agreement. While not legally enforceable, a handshake deal can still hold weight in certain circumstances, such as in small business transactions.

Another example of a friendly agreement is a letter of intent. This is a non-binding document that outlines the key terms of a potential agreement. It`s often used in business negotiations to signal that both parties are interested in moving forward with a deal, but that further negotiation and due diligence are needed.

Friendly agreements can also be used outside of the business world. For example, friends may make a friendly agreement to split the cost of a vacation rental or to take turns hosting dinner parties. While there may not be legal consequences for breaking these agreements, doing so can still damage relationships and trust.

Overall, friendly agreements can be a useful tool for establishing expectations and building trust between parties. However, it`s important to remember that they are not legally binding and should not be relied upon in situations where the stakes are high or the parties involved do not have a pre-existing relationship. In those cases, a formal agreement is necessary to protect all parties involved.