Handshake Agreements

A handshake agreement is informal.
A handshake agreement is informal. (Image: handshake 2 image by chrisharvey from Fotolia.com)

A handshake agreement is also known as a verbal, or “gentleman’s agreement” and means an informal understanding reached between two parties. A handshake agreement can be made over business or personal matters. It is based on trust and relies on the honor and integrity of the parties involved.

Legal Rights

State and federal laws exist to enforce verbal agreements, which represent a contract between two parties. Anyone considering entering into an important verbal contract should seek legal advice.


A handshake agreement is not considered to be a legally binding contract unless a firm offer is made and accepted. Each party must give the other something of value, such as money or even a promise, to seal the agreement.


Verbal agreements are difficult to prove or enforce if no witnesses are present when the agreement is made. If such cases are contested, it comes down to a case of one party’s word against the other.

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