A handshake agreement still means something here in Georgia. Nevertheless, it is good business to put agreements or deals in writing, either a prepared agreement at the time of the handshake or with a follow up after the deal to reiterate the agreement. There are different types of contracts that can cover any number of business agreements. A commonly used one is the option contract.
At a glance
Option contracts are opportunities to sell or buy goods or services for a specific price if the deal is signed within a particular window of time. Common examples include a real estate transaction where the property needs an inspection and financing secured, or an opportunity to buy company stocks. If all goes well, the buyer does the footwork, agrees to the terms and then signs the contract within the stated framework of the option.
Why use them?
Some may look at these contracts as too elaborate, but an option agreement can provide stability when the value of the product or service varies daily, weekly or even seasonally. Small businesses or start-ups may also use option contracts as part of a benefits package, which may give an employee the option to purchase company stock at a significantly reduced price, or the original price at the time the contract was drafted while the stock continues to increase in value as the company grows.
It is best to have an attorney draft contracts
It is good business to have an attorney draft contracts for a business, regardless of whether it is an option contract or some other type of contract. This ensures that both sides can be held accountable as the agreement is fulfilled. Those with questions should discuss them with an attorney who works in business law here in Georgia and understands how the state’s laws apply.