Handshakes vs. Contracts: When It's Time To Sign A Contract

For centuries, a conversation and a handshake have often sealed a deal. It's a time-honoured tradition built on trust, relationships and shared values that is still carried on in many farming communities. But as agriculture becomes more complex—with more contracts, more volatility and far higher stakes—farmers and agribusiness owners must ask themselves some tough questions. When is a verbal agreement and a firm handshake enough, and when should you get it in writing?

The enduring power of the handshake

Handshake agreements have long been the backbone of rural business dealings. They have meaning between parties, signifying integrity, respect and mutual understanding. In many farming communities, neighbors have done business this way for decades—buying feed, leasing land, selling crops—based on a simple verbal agreement and a firm shake of the hand.