Handshake Agreements: Legally Binding or Just a Gesture?
The recent legal proceedings involving Super Retail Group (SRG) highlight the complexities and potential pitfalls of informal agreements, often referred to as “solicitor’s handshakes.” In a case that has captured attention, former company secretaries Rebecca Farrell and Amelia Berczelly allege that a binding settlement was reached shortly after their termination, based on oral negotiations and subsequent communications. However, as reported by multiple publications, SRG disputes the existence of such an agreement, arguing that any terms were merely “in principle” and contingent upon formal documentation.
The Importance of Clarity in Agreements
The term “solicitor’s handshake” signifies a mutual understanding between legal representatives that an agreement has been reached. In this case, counsel for Farrell and Berczelly contended that the negotiations culminated in a binding contract, reflecting the trust and commitment inherent in such professional exchanges. Yet, SRG’s legal team characterised the notion of resolving a significant workplace dispute through an informal agreement as “fanciful,” emphasising the need for written contracts in serious matters.
Risks of Informal Agreements
The ongoing trial underscores the risks associated with handshake agreements. Justice Michael Lee expressed concerns about the ambiguity created by communications, and specifically in this instance, the party’s representative stating their acceptance would be “subject to deed,” as opposed to immediately and directly accepting per client’s instructions. This case serves as a reminder that while verbal agreements can be legally binding, they often lead to disputes over interpretation and enforcement.
Conclusion
As demonstrated in this case, the reliance on informal agreements can lead to significant legal challenges. At Brand Partners, we understand the importance of clear and enforceable contracts in commercial law. Our team is dedicated to providing expert legal advice to help businesses navigate these complexities and protect their interests. Whether you are negotiating a settlement or drafting a contract, Brand Partners can help ensure your agreements are robust and legally sound.
As at 12 December 2024, the matter of Rebecca Farrell v Super Retail Group & Ors proceeding no. NSD1009/2024 has been heard. We eagerly await the Federal Court’s judgment.
The recent legal proceedings involving Super Retail Group (SRG) highlight the complexities and potential pitfalls of informal agreements, often referred to as “solicitor’s handshakes.” In a case that has captured attention, former company secretaries Rebecca Farrell and Amelia Berczelly allege that a binding settlement was reached shortly after their termination, based on oral negotiations and subsequent communications. However, as reported by multiple publications, SRG disputes the existence of such an agreement, arguing that any terms were merely “in principle” and contingent upon formal documentation.