Take no one for their word, if they want to do business with you, make sure you sign an agreement before you start. Ten years on the continent and I've seen many grown, seemingly respectable people lie to get out of previously agreed financial obligations. Too many relationships go sour over informal money related agreements, but this is avoidable.

I hear you saying but surely not every one is like this. "What about your best friend, your sister, what about someone who is really rich? They would never cheat me on a business deal right? "Wrong! Money Changes Everything.  It isn't always a question of people intending to cheat you, rather about the way money increases the stakes for everyone involved (and yes there are those who also set to cheat you from the start) and makes people show their true character.  

In 2007 I co-founded a fashion company with my childhood best friend. We never stated the scope of our partnership, everything was an understanding. We were really naive; more in love with each other, and the brandto do due diligence about our partnership. Less than a year into the business having invested my time, resources, ideas, and money and I had to walk away from the business and our friendship. Had we talked through our plans and ideas in the beginning, had we signed an agreement, and allocated responsibilities and shares I still believe we would be running that company today. We were able to salvage our relationship years later and the love is still strong but to this day it still pains me that we didn't build it the way we had envisioned.

Since that failed fashion partnership I no longer venture into any agreement without something signed on paper. And sticking to this rule means that I can hold others accountable when they want to renege on an agreement. 

Money causes amnesia. I don't know what it is about money that makes people forget what they said or what you agreed. At the start of this year my rent was due. In Ghana we pay our rent a year in advance (don't ask me why, its what I came to meet). Just as I was planning to pay, I get a visit from someone purporting to be my landlord's brother. He comes to tell me that the landlord has decided to triple my rent. After 30 minutes of discussion I ask him if he has my tenants agreement. This created an instant stammer. No he does't have it. I had it though and proceeded to my file of agreements (yes I have a file with all my signed agreements).

I read the part out to him that said "three year lease, payable annually for an amount of....". When he left beaten by my refusal to budge on the agreement, the actual landlord came to see me. I welcomed my landlord even offered him water and then before he started to get comfortable I went to collect my agreement. Each time I produced this agreement it changed the tone of the conversation.  And no matter what we discussed so long as it was not in our agreement I stood my ground. If we hadn't signed an agreement I am absolutely convinced they would have increased my rent. At the end of the day the agreement protected me and my money and it also let the landlord know that I wasn't a push over who didn't know their rights. My rent was not increased because I had my agreement. 

Money makes those who owe you smear you. My marketing company took on a new client last year. This was one of those rare cases where it was the client who come to us and asked us for a proposal. I didn't even have to convince the client because very early on he said he already knew and believed I was the only one who could help them the way they needed.

We spent months on the details and at one point I even told him that we could table the discussion if they were not ready to sign. He said no, he was, and he was working on finances. We gave him a discount. He signed the agreement guaranteeing that payment would not be an issue but half way into the contract, he stopped paying. After multiple reminders, both via email and in person he said we should give him two months. We agreed to this at a meeting in his office.

As soon as we left the meeting I sent an email to confirm what we had discussed and that he had agreed to pay us in two months. I sent him the revised payment timelines. This man refused to respond to that email confirming what we discussed in the meeting. Instead he wrote to say that he wasn't even satisfied with the services and that my staff had not delivered. By the time he wrote to say this his payment was 3 months overdue. Today its an issue for which I am preparing to take legal action. The agreement that he signed has penalties for late fees up to 50% the total cost of our retainer. Should we go to court the full amount he owes us includes the late fees. If we didn't have a signed agreement I would have no recourse to the funds. So while he still hasn't paid I know that he will because this wasn't a discussion we had, we signed an agreement on paper. He can say we didn't deliver but the facts remains that he is still legally bound by our agreement to pay up and he will have to.

In the past I've signed agreements with all kinds of people for various reasons; I've signed agreements with models, photographers, celebrities, non-disclosure agreements, non-compete agreements, loan agreements (both as lender and borrower), tenant agreements, employment agreements (both as employer and employee), and retainer agreements.

Agreements are a very useful tool both as you negotiate new relationships and maintain old ones. Presenting someone with a draft agreement lets them know you're not only serious about your business but also that you're not one to mess with. Even with an agreement they will try, but at least you will have the terms that your signed clearly stated just incase they come at you with a severe case of money induced amnesia and lies. 

For draft agreements check out these ones on Lexus Nexus - http://www.lexuniverse.com/draft-agreement.html. What you want to do is find the one that