Handshake Deals Create Expensive Disputes

A handshake can start a business relationship. It should never be the only thing holding it together.

In the entertainment industry, deals often come together quickly. A producer agrees to finance a film over coffee. Two songwriters decide to split ownership after an afternoon writing session. A content creator hires a videographer with a few text messages and a verbal promise to "work out the details later."

Everyone is excited. Everyone trusts each other. No one expects the relationship to fall apart.

Then the project takes off.

Money starts coming in. New opportunities arise. Someone wants a larger share of the profits. Suddenly, the details that seemed so clear in the beginning are now a blur.

That's when a handshake deal becomes the most expensive contract you never wrote.

Why Handshake Deals Go Wrong

Most business disputes don't begin because someone intended to cheat another person. They begin because people remember conversations differently.

Questions start to surface:

• Was ownership supposed to be split?
• Was that payment a loan or an investment?
• Were future profits included?
• Who owns the copyright?
• Was the work considered "work made for hire?"
• Was there a deadline?
• Could either party walk away?

Without a written agreement, these questions become expensive to answer.

A Verbal Agreement May Be Enforceable—But That's Not the Point

Depending on the circumstances and the applicable state law, an oral agreement may be legally enforceable. The real challenge, however, is proving exactly what the parties agreed to.

If there are no emails confirming the terms, no signed contract, and no written record of the deal, a disagreement often becomes a battle over credibility.

Instead of relying on clear contract language, everyone is left arguing about what they believe was said months—or even years—earlier.

That uncertainty dramatically increases legal costs and business risk.

The Entertainment Industry Is Especially Vulnerable

Entertainment projects often begin between friends, family members, classmates, or long-time collaborators.

A filmmaker promises a producer a percentage of the profits.

A songwriter agrees to split ownership later.

A photographer licenses content without discussing future uses.

An influencer creates content before defining ownership rights.

A production company hires crew members without documenting intellectual property ownership.

Everything feels simple until money starts coming in. Then, success has a way of exposing agreements that were never clearly defined.

A Written Agreement Protects Everyone

A contract isn't a sign that you don't trust the other person. It's a tool that ensures everyone understands the same expectations from the beginning.

Even a straightforward agreement can address issues such as:

• Payment terms and compensation
• Ownership of copyrights and other intellectual property
• Project scope and deliverables
• Deadlines and timelines
• Profit-sharing arrangements
• Credit and attribution
• Termination rights
• Confidentiality
• How disputes will be resolved

By documenting these terms upfront, parties can spend their time building successful projects instead of arguing about what was supposedly agreed upon months or years earlier.

Protect the Relationship Before Problems Arise

The best contracts are rarely the ones that end up in court. They're the ones that prevent disputes from happening in the first place.

Whether you're producing a film, negotiating a music collaboration, hiring creative talent, or launching a new entertainment venture, taking the time to put your agreement in writing can protect your investment, preserve valuable relationships, and reduce unnecessary legal risk.

At Mason Firm, LLC, a New Jersey entertainment law firm, we help filmmakers, producers, musicians, creators, and entertainment businesses structure agreements that protect their projects, strengthen their business relationships, and position them for long-term success.

Frequently Asked Questions



Are handshake deals legally enforceable?

In some situations, yes. Depending on the applicable state law and the facts of the transaction, an oral agreement may be enforceable. However, proving the specific terms of the agreement is often far more difficult than enforcing a written contract.

Do I need a written contract if I trust the other person?

Yes. A written agreement isn't about distrust; it's about ensuring both parties have the same understanding of their rights and responsibilities before problems arise.

Can text messages count as a contract?

In some circumstances, emails and text messages may help establish the existence or terms of an agreement. However, relying on scattered communications is far riskier than having a properly drafted written contract.