Oral Partnership Agreement

When starting a business, one of the most crucial steps is to establish a partnership agreement. A partnership agreement outlines the roles, responsibilities, and expectations of all parties involved in the business. However, establishing a partnership agreement can be a daunting task, especially when it comes to oral partnerships.

An oral partnership agreement is an agreement made verbally between two or more parties. Although it is legally binding, it is not a recommended method of agreement. A written partnership agreement is the best practice when it comes to partnerships. However, in some cases, an oral agreement may be the only feasible option.

Here are some things to consider when establishing an oral partnership agreement:

1. Clear communication: When establishing an oral partnership agreement, clear communication is key. All parties involved should have a clear understanding of their roles and responsibilities in the business. The terms and conditions of the agreement should be discussed and agreed upon by all parties.

2. Record everything: Even though the partnership agreement is being established verbally, it is crucial to document everything. Record the date, time, and location of the agreement, and all the terms and conditions agreed upon by all the parties involved. It is best to have a written record of the agreement in case of any disputes or misunderstandings in the future.

3. Seek legal advice: Even though an oral partnership agreement is legally binding, it is advisable to seek legal advice before entering into such an agreement. A lawyer can provide guidance on what terms and conditions should be included in the agreement, and how to document it appropriately.

4. Review regularly: An oral partnership agreement can change over time. As the business grows and evolves, the agreement may need to be updated to reflect these changes. It is essential to review the agreement regularly to ensure that all parties involved are still satisfied with the terms and conditions.

In conclusion, while a written partnership agreement is always the best practice, an oral partnership agreement may be necessary in some cases. If you must establish an oral partnership agreement, ensure that clear communication, documentation, legal advice, and regular reviews are in place. By following these steps, you can help ensure a successful and long-lasting partnership.