Johnny Depp and the Handshake: Tips for Forming Business Agreements
Remember all of the “contracts” that you made as a kid? For an example – agreeing with a friend to split the proceeds earned from snow shoveling? Even as adults, significant agreements are sometimes preliminarily sealed with a handshake. However – are they enforceable?
Johnny Depp recently settled a lawsuit against the law firm of Bloom Hergott, reflecting the risks of “agreeing to agree” without a written contract. Bloom Hergott collected over $30 million in fees from Depp over the course of several years. Depp later claimed that he never agreed to Bloom Hergott’s fee structure, ultimately suing for fraud and conflict of interest, among other causes of action.
Bloom Hergott (which has since restructured its firm) claimed that the agreement formed with Depp – though unwritten – was enforceable. However, a judge disagreed with the firm’s request to dismiss Depp’s claims via summary judgment. The recent settlement was made in advance of trial.
I recommend avoiding the temptation to keep agreements informal. Depp’s case illustrates the potential danger and liability – even with relationships you’ve maintained for years. Consider the following tips after making an informal or oral agreement:
- Mention at the outset that you will follow up with a written agreement to be signed by both parties.
- Make sure that the major terms that you discussed are in the agreement – even if they seem “obvious.”
- Consult with legal counsel to double check the enforceability of your agreement.
Depp’s case is a great reminder that a little extra work up front may save millions of dollars in the future. Feel free to reach out to me to discuss memorializing an existing agreement or an upcoming venture.
If you have any questions about this or any other Labor and Employment topics, please contact me at firstname.lastname@example.org or 703-745-1849
ABOUT THEODORA STRINGHAM
email@example.com | 703-745-1849
Theodora Stringham assists individuals, businesses, and organizations with growing successfully while minimizing liability. Focusing on real estate and personnel needs, Ms. Stringham executes sustainable plans for real estate development and employee matters. She provides comprehensive representation for everyday growth issues, including, but not limited to, re-zonings, site plan approvals, eminent domain/valuation concerns, employment discrimination, and disciplinary issues. Ms. Stringham’s scope of representation ranges from identifying potential liability and providing counseling/trainings, all the way through representation at trial.
ABOUT OFFIT KURMAN
Offit Kurman is one of the fastest-growing full-service law firms in the United States. With 14 offices in seven states, and the District of Columbia, and growing by 50% in two years through expansions in New York City and Charlotte, North Carolina, Offit Kurman is well-positioned to meet the legal needs of dynamic businesses and the individuals who own and operate them. For over 30 years, we’ve represented privately held companies and families of wealth throughout their business life cycles.
Whatever and wherever your industry, Offit Kurman is the better way to protect your business, preserve your family’s wealth, and resolve your most challenging legal conflicts. At Offit Kurman, we distinguish ourselves by the quality and breadth of our legal services—as well as our unique operational structure, which encourages a culture of collaboration and entrepreneurialism. The same approach that makes our firm attractive to legal practitioners also gives clients access to experienced counsel in every area of the law.
Find out why Offit Kurman is The Better Way to protect your business, your assets and your family by connecting via our Blog, Facebook, Twitter, Instagram, YouTube, and LinkedIn pages. You can also sign up to receive LawMatters, Offit Kurman’s monthly newsletter covering a diverse selection of legal and corporate thought leadership content.
DELAWARE | MARYLAND | NEW JERSEY | NEW YORK | NORTH CAROLINA | PENNSYLVANIA | VIRGINIA | WASHINGTON, DC