Putative agreement is a legal term used to define an agreement that is believed to exist but hasn`t been officially established. In other words, it refers to a situation where two parties agree on something, but there is no formal contract or written agreement in place.
Putative agreements are common in business transactions, where two parties may verbally agree to terms and conditions, but fail to formalize the agreement with a written contract. This can lead to disputes over the terms of the agreement, as the parties may have different interpretations of what was agreed upon.
In some cases, putative agreements may be legally binding, especially if the parties have acted in accordance with the agreement and have relied on it to their detriment. However, in most cases, putative agreements are unenforceable, and the parties may need to negotiate and formalize the agreement to ensure that it is legally binding.
It`s important to note that a putative agreement can also arise from a misunderstanding or miscommunication between the parties. For example, one party may believe that they have reached an agreement on certain terms, but the other party may have a different understanding of what was discussed.
To avoid the uncertainty and potential risks associated with putative agreements, it`s always best to formalize any agreement with a written contract. This will ensure that both parties are clear on the terms and conditions of the agreement and can refer to the contract in case of any disputes.
In conclusion, putative agreement refers to a situation where two parties believe they have an agreement in place, but it has not been formally established. While this type of agreement may be legally binding in some cases, it`s always advisable to formalize any agreement with a written contract to avoid potential disputes.