Blair Atwebembeire.
In today’s fast-paced world of business, relationships are often at the heart of our transactions. We trust our partners, and many times, these partnerships are founded on long-standing friendships. However, recent experiences have taught me that even the strongest bonds can sometimes fray, leaving businesses vulnerable and unprotected.
In my years as a legal practitioner, I’ve witnessed countless cases of business relationships gone sour, where handshakes and verbal agreements were the only evidence of a deal. From lending money to a struggling business partner to supplying goods and services without a trace of paperwork, these informal arrangements might seem convenient, but they can also lead to a world of trouble when things go south.
Trust and good faith are undoubtedly crucial in business, but it’s equally important to acknowledge that personal relationships can sour unexpectedly. When this happens, your business is at risk. I’ve always advised my clients that while friendships can lay the foundation for successful business relationships, we should never leave our transactions in the personal sphere, for the sake of our businesses. Businesses should thrive beyond personal relationships.
The key to protecting your business transactions lies in documentation, regardless of the transaction’s value. A written record, such as a contract, serves as proof of the details of your agreement. It provides clarity about each party’s obligations and ensures that everyone is on the same page. In contrast, oral contracts often leave questions unanswered, leading to challenges when misunderstandings arise.
Furthermore, life is unpredictable. People may pass away or become incapacitated, and memories can fade over time. Different parties involved may have varying recollections of the agreement. When it comes to enforcement, written contracts hold a significant advantage. In Uganda, for instance, the law mandates that contracts exceeding Uganda Shillings Five Hundred Thousand (approximately One Hundred Thirty Five United States Dollars) must be in writing. This means that enforcing oral contracts can be a legal challenge. While lawyers can use legal principles to support the enforcement of oral contracts, it’s always advisable to err on the side of caution by maintaining clear records of your business transactions to mitigate the risk of loss.
Clear records, such as written agreements, also make it easier for third parties, like judges and negotiators, to resolve disputes. These professionals can refer to the agreements, which can help streamline the decision-making process and lead to fairer outcomes.
You might wonder if it’s too much to write agreements for every single transaction you’re negotiating. With the advent of technology, maintaining records has become less burdensome. It’s also wise to keep a legal practitioner on call to review contracts, adding an extra layer of protection that could potentially save your business from significant losses.
In conclusion, the power of a clear record cannot be underestimated in the world of business. While trust and personal relationships are vital, safeguarding your business with written agreements is a smart move. It’s a small step that can make a significant difference when the unexpected happens. So, the next time you’re considering a business deal, remember: put it in writing; it’s your insurance policy for a successful and secure business journey.
Mr. Blair Atwebembeire is an Advocate of the High Court of Uganda. E-mail: blair.advocates@gmail.com
