Don’t overlook the hidden risk in ‘friendly’ business relationships

Some of the most difficult business disputes don’t start with bad intentions. They start with good relationships.

A friend. A referral partner. A long-time vendor. A handshake agreement built on trust.

And then something changes.

Why informal deals are driving formal disputes

At Goosmann Law Firm, we are seeing an increasing number of disputes that originate from informal, relationship-based deals that were never clearly documented.

This year, a significant share of the disputes we’re handling stem from handshake or loosely defined agreements, where each side believed the terms were clear, but nothing was clearly written down.

Common scenario

A business owner partners with someone they’ve known for years to launch a new venture. They agree to “split things 50/50” and move quickly to get started—no formal agreement, just emails and conversations.

Six months in:

• One partner believes they’re owed reimbursement for upfront expenses.

• The other believes profits should be split before any reimbursements.

• Both believe they are doing more of the work.

The relationship deteriorates. Communication stops. The business stalls.

By the time legal counsel gets involved, there’s no clear agreement to point to, only competing interpretations of what felt obvious at the time.