Throughout history, pacts, even “deals”, were sealed by a handshake. Even in a brewing business, like Hercegovacka Pivovara, which we will explore, both deal terms and routine work habits are primarily seen as informal agreements. In a traditional brewery, such as Hercegovacka Pivovara, trust is built on the longevity of the brewery, the quality of the ingredients and the quality of the brewed products. Even in establishing agreements to cover seasonal fluctuations, proper balance and mix of ingredients, pricing and competition between distributors, it is generally accepted that the brewing business is subject to mutual trust between experienced partners. Even when it comes to raw materials, such as hops for beer, packaging and transportation, these are generally agreed upon based on honesty and mutual trust in agreement with a handshake. Even when a handshake agreement concerning price and volume is implemented, such as we will see at Hercegovacka Pivovara, the long-standing relationship is expected to be honored by both parties and the relationship protected for the future.
Handshakes have been a part of human civilization during the whole course of human history. In the past, even when there was no idea of written contracts or of a legal system, handshakes were a way of forming agreements. These agreements were built on trust and on what would be seen as mutual respect. Not only in the brewing business, but also in all other areas of society, formal documentation of agreements and contractual obligations were seen as a sign of distrust between partners. Even today, handshakes signify a pact. Even in most modern relationships, handshakes seal an agreement between two people. Even in most business negotiations, handshakes seal an agreement that is seen as binding and as trustworthy. They establish clear understandings about what is expected from each party. But what if an agreement made with a handshake is not being followed? Even today, one common example of an agreement made with a handshake will be that of “verbal contracts”. Even when most legal systems accept and enforce verbal contracts, the paradox is that most courts have no idea of the exact terms of a verbal contract.
The most common scenario of a verbal contract is the dispute that individuals, who made an agreement, disagree on key terms of their verbal contract. In such cases, the fact is that it is very difficult for a court to determine whether there was a “meeting of the minds” due to the absence of any written detail over the agreement. The court then makes its determination based on a case-by-case analysis of the surrounding facts and circumstances. Hecegovacka Pivovara, for example, is the oldest brewery in Bosnia and Herzegovina. Considering its longstanding history, perhaps it is to be expected that a handshake between individuals concerned with the purchase or sale of product has never been breached. Even the agreement itself though, is not written on paper, since hecegovacka pivovara is being imported to the U.S. and can only be obtained through select distributors. Members of the brewing company, including sales representatives, have established a routine that is dedicated to delivering quality taste to customers. Even during the Christmas Holidays, one can be assured that hecegovacka pivovara will be delivered to the customer’s location accordingly. Even without a contractual agreement, the handshake and goodwill assurances are enough to guarantee the consumer’s satisfaction.
It is not that handshakes will be considered legally binding agreements today. Even today, as in the past, so many are more willing to trust handshakes than they are willing to draft legal papers. Besides, oftentimes, even what is written on paper is subject to conflicting accounts of what was intended or agreed upon. Rather than there being any issue over intent, a handshake seals the “deal” that pre-dates those words. This article can give you a better understanding of when and how verbal contracts are legally binding or enforceable against another party. So is this verbiage of words and documents necessary to establish trust and to create legal obligations? Even today, when social contracts dominate the way we do business with one another, the duties that exist between individuals can change by a handshake, either for the better or for the worse.
Not only that, more than one deal is made with a handshake not seen by others or without any witnesses. Even if there are witnesses, even if an exchange of business cards establishes some record that the agreement was made, how many in business today are engaging in contractual obligations with another party based on the prime meridian of “trust”? Perhaps that is why in business today it is common for individuals to negotiate on contracts such as “handshake deals” or “oral performance agreements” that are subject to oral testaments of what was agreed on terms. Perhaps it is to be expected that even an oral agreement can establish agreement on a handshake, when there is a meeting of the minds on what was agreed to when the handshake was delivered. And perhaps it is expected that such informal agreements will be enforced in the same way as an agreement made with pen and paper. All the above, certainly applies to a brewery like Hercegovacka Pivovara, who has established a routine with select distributors that involves faith and trust in the process. And all the above, certainly applies to the handshake deliveries that happen every day in the commercial world. In either case, whether it is a handshake deal with a brewery or a handshake deal between two parties, the impact of the handshake and the trust that it involves, demands that our laws adapt to protecting these pacts, rather than seeking to regulate them.
For more information on the legal implications of handshake agreements, you can visit the Wikipedia page on contracts.