Common Law Agreements Between Friends: What You Need to Know
When it comes to making agreements with friends, it may seem unnecessary to put things in writing. After all, you trust your friends and believe that they will keep their word. However, even the strongest friendships can be tested by disagreements and misunderstandings. That`s why it`s important to have a clear and formal agreement in place to avoid any potential conflicts down the road.
What is a Common Law Agreement?
A common law agreement is a legally binding contract between two or more parties that is not governed by any particular statute or law. Unlike formal contracts that are drafted by lawyers, common law agreements are typically created by the parties involved and do not need to be registered or filed with any government agency.
Common law agreements are often used between friends who are starting a new business venture or undertaking a joint project together. They can also be used to clarify the terms of a personal loan, a rental agreement, or any other agreement that is made between friends.
Why You Need a Common Law Agreement with Friends
Even though you may trust your friends, it`s important to remember that misunderstandings can still occur. A common law agreement can help to prevent misunderstandings by setting out the terms of your agreement in writing. It can also be used in court if there is a dispute between the parties and can provide evidence of each party`s obligations and responsibilities.
Common law agreements can also help to ensure that all parties are on the same page before any work begins. By outlining the expectations and responsibilities of each party, you can avoid any confusion or miscommunication that might arise later on.
How to Draft a Common Law Agreement
When drafting a common law agreement with friends, it`s important to be clear and concise. The agreement should include the following:
– The names and contact information of all parties involved
– The purpose and scope of the agreement
– The responsibilities and obligations of each party
– Any deadlines or timelines
– Any penalties or consequences for failing to meet obligations
– Any dispute resolution procedures
It`s a good idea to have each party review and sign the agreement before any work begins. This ensures that all parties are aware of their obligations and responsibilities and that everyone is on the same page.
While it may seem unnecessary to have a formal agreement between friends, it`s important to remember that misunderstandings can still occur. By having a common law agreement in place, you can avoid any potential conflicts and ensure that everyone is on the same page. With clear expectations and responsibilities outlined in writing, you can confidently embark on your joint project or business venture with peace of mind.