As a business owner, you may find yourself in need of a commercial space to lease for your operations. Before you sign on the dotted line, it’s important to understand the potential risks of a verbal agreement.
A verbal agreement, also known as an oral contract, is a legally binding agreement made between two parties without any written documentation. While verbal agreements can be legally binding, they are often difficult to enforce in court due to lack of tangible evidence.
This is especially true for commercial lease agreements, which can involve significant financial commitments and legal complications. A verbal agreement for a commercial lease may seem like an easy option, but there are several potential pitfalls to consider.
Firstly, there may be disagreements about the terms of the agreement. Without a written contract, it can be difficult to remember the specific details agreed upon. This can lead to disputes between the landlord and tenant regarding rent payments, maintenance responsibilities, and lease duration.
In addition, verbal agreements are easily forgotten or misunderstood. One party may have a different memory of what was agreed upon, leading to confusion and miscommunication. This can cause delays in lease negotiations, and even result in legal action if the differences cannot be resolved.
Furthermore, a verbal agreement may not include all necessary provisions required by law. For example, commercial leases are subject to specific laws and regulations that must be followed to ensure the lease is valid. A verbal agreement may not include these provisions, leaving both the landlord and tenant vulnerable to legal challenges.
To avoid these potential risks, it’s always recommended to have a written lease agreement signed by both parties. This provides a clear outline of the terms and conditions of the lease, and serves as a legal document in case of any disputes.
When drafting a written lease agreement, it’s important to consult with a lawyer to ensure all legal requirements are met and that both parties are protected. It’s also important to review the agreement carefully and ask any necessary questions before signing.
In conclusion, while verbal agreements may seem convenient, they come with significant risks that could be detrimental to your business. Always opt for a written lease agreement to ensure the protection of all parties involved.