Why You Should Never Mix Business With Friendship

List: Posted: 09/20/11

You have probably heard the old saying that you should never do business with family and friends.  As with many sayings such as this, it does have an element of truth to it.  When you mix money matters of business into relationships with the people you care about, things can get out of hand very quickly.

For example, if you lend money to a friend so that he or she can start a business, you will probably fully expect to have the money back within a certain amount of time.  You'll see the cash as a short-term loan rather than a gift, but when dealing with people who have close relationships with you, they might not see it this way. 

 

For example, if you lend money to a close friend or a financially struggling family member, the will most likely expect you'll be "nice enough" to allow them to keep the loan indefinitely, or at least until a time where their new business is making enough money that they feel they can spare the cash to repay you. 

 

This can cause a host of different problems, and it can easily ruin even close friendships overnight.  You might find that it even makes those family gatherings around the holidays uncomfortable when the only thing people are thinking about is the money they owe you (or vice versa).

However, you can still do business with your friends and family as long as you take the proper precautions and everyone agrees to them. 

 

The best and simplest way to do this is with a contract.  Make sure that the contract spells out the agreement entirely, including any money dealings, deadlines and repayment terms.  Don’t rely on another friend or family member to be your witness to the contract because shifting loyalties among families and friends are unfortunately common.  It’s in everyone’s best interest to have a notary or lawyer present in this instance.  If this makes you uncomfortable - don't lend out the money in the first place.

 

Attorneys & Lawyers: General Practice

    Raymond A. Ceresa formed the Ceresa Law Firm in 1997 to specialize in the representation of condominium and homeowners associations in Northern Virginia. Having spent over a decade at a large law firm, Mr. Ceresa started his own firm so that he could provide better and more individualized service to his community association clients than he could at a large firm. The Ceresa Law Firm provides large firm experience, with more personal service and the more reasonable billing rates of a small firm. We pride ourselves on offering exceptional customer service and promptly responding to our clients’ needs. Our firm has significant experience representing condominium and homeowners associations with covenant and architectural violations, interpretation and revision of governing documents, board of directors issues, warranty claim negotiation and litigation, assessment collection and anything in between.

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      The material in this article is for informational purposes only. The views expressed in this article are those of the author and do not necessarily reflect the views or opinions of Local.com. See Additional Information

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