Remember when you were a kid and your parent, likely half listening to you, agreed to give you a chocolate bar you really shouldn’t have been getting that close to dinner? When your parent then actually listened to your request and changed their mind, the first thing you said was: “but you promised”.
Unfortunately, many businesses find themselves saying the same thing to customers who agreed to pay for goods or services and then decided not to.
One of the first questions we ask when a business wants to collect money is: “did you get it in writing?” If the answer is no, it does not mean that the money cannot be collected. An agreement can be enforced, even if it is not in writing.
However, the lack of a written agreement will usually eliminate the right to collect interest beyond the 1% of the Courts of Justice Act rate and your legal fees will not be reimbursed at 100%.
When pressed as to why they didn’t get a signed agreement, many businesses say “that’s not how it’s done in our industry.” That may have been the case many years ago, however, most businesses today get signed agreements and those who refuse to sign an agreement probably shouldn’t be trusted.
The days of the handshake deal are dead. There is no best business practice that says seal a deal with a handshake and a smile: that is just not done. Why risk it? Why risk your cash flow on someone who says “trust me”. If there is no intention to default, there should be no problem signing an agreement.
You don’t want to be left in the position of having to say: “but you promised”.