So let it be written, so let it be done.

Consumer lending has evolved into an assembly line where borrowers collect, or provide access to, a selection of paperwork that demonstrates their ability to repay a loan. Lenders review that information according to a standard set of risks. If you qualify, you get the loan; if not, too bad so sad. When bankers approve loans, the parties sign the form contracts forgoing any meaningful negotiation as the rates are set based on formulas that evaluate credit risk, amount and length of loan, and current interest rates. If the borrower doesn't like the terms, the banker offers no room for negotiation to find agreeable terms. You either qualify or you don't.

When negotiation and personal interaction left the lending space the nature of borrowing and lending changed, and not much for the better. When you negotiate an agreement with people you know there are three really good reasons to reduce the plan to writing. First, it helps everyone remember what was said and makes sure that all the participants were really reaching the same conclusion. Second, written agreements, especially for the lending of money, protect the lender from other creditors that the borrower might have. Third, if things don't go well under the agreement, it is always preferable that the consequences are outlined in advance when everyone is agreeable rather than wait for the problems to arise and try to sort it out when tensions may cloud a reasonable resolution.

There is one compelling reason to never have a written agreement. If either party requires a written agreement to protect themselves from the other party they should avoid entering into any agreement unless absolutely necessary. A complex society sometimes requires that opposing parties collaborate to find a common ground that permits mutual benefit. One family court judge often told divorcing parents who appeared before him that he was honored that they would trust him, a complete stranger, to decide such important issues as custody and visitation for their children. He would then extend to them an offer to try again to work it out amongst themselves where they could be more certain of the outcome rather than risk the reality that neither would likely be happy with the decision he would make.

I affirm that having a written agreement and contract represents the wisest course of action. Too many people become after-the-fact fools when deals go bad and promises remain unfulfilled. Relationships, friendships and even families disintegrate because of unwritten pledges and expectations that vanish into thin air, regardless of intentional bad actions or unforeseen circumstances that make their fulfillment impossible. Nevertheless, I consistently find that the best written agreements are those that the parties never use. They have one, but it sits in a drawer as they go about their business, in good times and bad, and never have to review the written word.

Heed this warning: If you need a contract to protect yourself from the very person with whom you are contracting; find a different partner.