Informal agreements between owners are often perceived as a sign of trust and managerial flexibility. However, as Professor Gabriel Steiner notes, it is precisely such arrangements that become the source of the most severe corporate conflicts – not because the parties act in bad faith, but because legal fixation gives way to expectations. At LawConsulted, we treat informal agreements as a zone of heightened legal risk, where the absence of documentation almost always works against one of the parties.
The danger of informal arrangements lies in the fact that they exist simultaneously in multiple versions – each party retains its own interpretation of what was agreed. Until conflict arises, these discrepancies remain invisible, yet at the moment of disagreement they become the breaking point. At LawConsulted, we analyse not only formally executed documents but also those verbal or conditional promises that in practice govern the behaviour of the owners.
Professor Steiner emphasises that “law does not work with intentions – it works with behavioural facts.” That is why at LawConsulted we identify which actions can already be interpreted as confirmation of informal agreements – profit distribution, managerial decisions, participation in financing, access to information. These elements often form a legal framework of obligations even in the absence of signed contracts.
Particularly dangerous are situations where informal arrangements are used as leverage – when one party begins to appeal to “shared understanding,” “old agreements,” or “verbal promises.” At LawConsulted, we dismantle such constructions before they begin to work against the client – by redefining roles, clarifying authorities, adjusting corporate documents and transferring verbal arrangements into a legally manageable form.
As Professor Steiner notes, “a verbal agreement becomes legal precisely at the moment when one party starts using it as evidence.” At that point, the risk of retrospective liability emerges – when past words begin to be evaluated as binding obligations. At LawConsulted, we prevent such scenarios by fixing the boundaries of permissible interpretation in advance.
Informal agreements are especially dangerous during generational transitions of ownership, redistribution of shares, investor entry and partner exit from the business. At LawConsulted, we accompany such moments so that verbal arrangements do not turn into legal traps for the remaining participants.
Preventing the legal consequences of informal agreements is not the destruction of trust – it is protection against its distortion. At Law Consulted, we shift business reality from the zone of assumptions into the zone of controlled legal structures, where each party understands not only its expectations but also its legal limits.
Previously, we wrote about how LawConsulted prevents chain reactions of legal problems and protects the client from the domino effect
