What are 'handshake agreements,' and are they binding?

If you are a baseball fan in Florida, you are likely aware that the Miami Marlins have had a challenging past few years, and it may not surprise anyone to learn that owner Jeffrey Loria is looking to sell the team. In fact, sources report that Loria has a "handshake agreement" with someone looking to buy the team for $1.6 million.

This story has left some people wondering what that means and asking the question in this post's headline. Are handshake agreements binding? And the answer is: maybe.

What is a handshake agreement, anyway?

A handshake agreement is essentially a verbal agreement between two parties. For these types of agreements to become binding, there needs to be:

  • An offer made
  • Acceptance of the offer
  • Consideration, or a valuable benefit that is being bargained

Why aren't all handshake agreements enforceable?

Even when these agreements are binding, there are numerous vulnerabilities when it comes to enforcing these handshake agreements.

To begin with, if you don't have any witnesses or a notarized document, it can be very easy for one party to back out of or violate an oral agreement.

Second, Florida laws dictate that certain types of contracts must be in writing to be enforceable in the first place. This can include real estate and marriage contracts, as well as any contract that cannot be performed within a year.

Finally, many people enter into verbal contracts without first consulting an attorney, which can be a big problem. An oral agreement might have several legal red flags and potential problems, but without legal guidance, parties may not be aware of them until it is too late.

Next steps

If you are considering a verbal contract, or if you are already party to one, you would be wise to consult an attorney before you do anything with the agreement. A lawyer familiar with contract laws and requirements can help you assess the merits of a contract and protect yourself and your interest s.