Risk of Partnerships- Business Organisation (Students’ Responses)
The response by student 1 on the importance of a written agreement in business is spot on. Many businesses, including partnerships with multi-million investment, are formed by a mere shake of hand. Student 1 has rightly indicated that such a move is laden with various risks, key among them being the possible loss of investment. The student has also given examples in other areas of life such as prenuptial agreements and the purchase of a motor vehicle where written agreements are now too common. However, I feel that the student has missed the importance of oral partnerships, in which trust alone is the binding element.
I like student 2’s comments on how businessmen can be so consumed in their implied trust that they do not see the need of a written agreement. The student has further reinforced their argument by providing a personal encounter with individuals who despite having negotiated contracts for years, are yet to learn the importance of written agreements in business. This is indicative of the extent to which oral partnerships have been sanctioned in the business world. However, the student seems to harbor the notion that oral partnerships are more to do with ignorance, as opposed to over-trusting the other party.
I like the approach used by student 3 in their response to the article, where they indicate that a partnership business is laden with a lot of rewards or risks. For the sake of the many risks that could affect a million dollar company, a partnership agreement, as opposed to an oral contract, is necessary. I presume that it would be safe to have a written agreement, despite the many complex terms and pages involved, than to rely on an oral agreement and suffer the risks involved.