One of the best insurance policies a cannabis business can get is a written contract. Paying a lawyer a little bit up front can save hundreds of thousands when things go south. A lot of folks in the cannabis industry are still doing deals on a handshake basis (you can see some of our older posts on handshake deals below). In this post, I’ll outline a few of the best reasons why written contracts beat handshake deals 99% (if not 100% of the time).
#1 The statute of frauds!!!
The Statute of Frauds is a legal doctrine that requires certain types of contracts to be in writing. If they are not in writing, they are generally not enforceable. For example, California’s Statute of Frauds requires written contracts for, among other things, agreements that cannot be performed within a year, for leases for a year or longer, and for loans over $100,000 in certain cases. If the parties try to do a handshake deal for something within the Statute of Frauds, one or both of them may be in for a rude awakening if there is ever a contract dispute if the court refuses to enforce the agreement.
#2 Cogently memorializing
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