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Agreeing to Disagree: The Danger of the “Side Agreement”

Throughout the ordinary course of business, small business owners regularly enter into a variety of agreements with third parties, including vendors, employees, consultants and service providers. More often than we like, we come across owners who contract a third party, reduce an agreement to writing BUT also agree to some sort of verbal side deal that is not reflected in the agreement. 95% of the time, this works…until it doesn’t. The parties may honor that “arrangement” for a while; then someone does not hold up their end of the bargain in the verbal agreement and now they are at war.

In cases like this, the parties essentially agree to disagree- at some point down the line. It is a recipe for disaster from the outset. Not only can these types of disputes disrupt your daily business operations (especially if the agreement is with an essential service provider) but most times they wind up in litigation, which can be expensive and very time consuming. Importantly, what most business owners do not realize is that there are certain legal doctrines (clue..Parol Evidence Rule!) that could bar them from introducing evidence of the side agreement! Of course, there are always exceptions that can be argued BUT this will require that you pay a skilled attorney for hours of work! This is not something you want to be faced with.

Why not reduce your entire agreement to writing and make ALL of the terms of your agreement clear and unambiguous? Do not risk it! Protect your interests!

Call C&G to assist you today!!!

P: (248) 395-3699 E: attyinfo@cg-legal-solutions.com

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