You shook on it. Maybe you were standing in a shop in Noblesville, or grabbing lunch off Keystone, or wrapping up a job site walkthrough in Fishers. The terms felt clear, the other person seemed solid, and writing it all up in a formal contract felt like overkill for people who had known each other for years. Then something changed. The work got done and the check never came, or the materials showed up short, or your “partner” decided his version of the deal was a little different from yours.
If you are a small business owner in central Indiana, this situation is more common than most people realize, and it is one of the most frustrating problems to land in. You know what was agreed to. The other person probably knows too. But now you are staring down a dispute with nothing on paper, wondering whether you have any real options or whether you just have to eat the loss.
The short answer is that you usually have more options than you think. Indiana law takes verbal agreements seriously in a lot of situations, and a handshake deal can absolutely be an enforceable contract. The longer answer, which is what this post is about, is that proving and enforcing one takes work, and some deals legally cannot be done on a handshake at all.
Are handshake deals actually legal in Indiana?
Yes, generally. Indiana recognizes oral contracts as binding when the basic elements of a contract are there: an offer, acceptance, consideration (meaning each side is giving up something of value), and a meeting of the minds on the essential terms. A verbal agreement to pave a parking lot for $8,000, to split the profits on a flip house 60/40, or to deliver 200 yards of gravel by next Friday can all be legitimate contracts even without a signature anywhere in sight.
The catch is the statute of frauds. Indiana, like most states, has a law that requires certain kinds of agreements to be in writing and signed to be enforceable. The big ones that trip up small business owners are contracts that cannot be performed within one year, agreements involving the sale of land or any interest in land (including leases longer than three years), contracts for the sale of goods worth $500 or more under the Uniform Commercial Code (though there are exceptions even there), and promises to pay someone else’s debt. If your handshake deal falls into one of those buckets, a court is probably not going to enforce it no matter how clear the terms were, with some narrow exceptions for partial performance and promissory estoppel.
So the first question to ask yourself is whether the deal you made was the kind that Indiana law allows to be done orally in the first place. For most short-term service agreements, smaller sales, and straightforward business arrangements between local companies, the answer is yes.
What you actually have to prove
Having a valid oral contract and being able to prove one in court are two different things. This is where handshake deals get hard, and where a lot of central Indiana business owners get discouraged before they should.
To win a breach of contract case based on a verbal agreement, you have to show a judge or jury that the agreement existed, what the terms were, that you held up your end, and that the other side did not. Without a written document, you are building that case out of everything else that exists in the world. Text messages back and forth confirming details. Emails referencing the arrangement, even casually. Invoices, estimates, or proposals that were exchanged before or after the handshake. Venmo, Zelle, or check records showing payments consistent with the deal. Witnesses who were in the room or who heard about the arrangement contemporaneously. Photos of work performed, materials delivered, or properties accessed. A course of dealing between the parties that shows how they typically operated.
None of that is as clean as a signed contract, but these kinds of cases are not rare in Indiana courts, and a thoughtful presentation of the surrounding evidence can carry real weight. Cases are sometimes won on a string of text messages that, stitched together, tell the whole story of the deal. Cases are sometimes lost because the business owner could remember every detail of the conversation but had no way to corroborate any of it. The difference is almost always in the documentation that surrounds the handshake, not the handshake itself.
What to do right now if a handshake deal has gone wrong
Before calling anyone, the first step is preserving what already exists. Do not delete text threads, email chains, voicemails, or call logs with the other party. Screenshot them, print them, back them up somewhere. Pull together any invoices, estimates, quotes, proposals, bank records, or internal notes that touch the deal. Write down, while it is fresh, exactly what was agreed to, when, where, and who else was present or heard about it afterward. Memories fade fast, and the version that can be reconstructed six months from now will be thinner than what can be written today.
Then think hard about what the actual goal is. Getting paid what is owed is one thing. Getting a job finished, getting materials returned, getting a partner out of a business, or recovering lost profits are different problems with different paths forward. Those goals shape whether a demand letter, a mediation, or a civil lawsuit makes the most sense. For a deeper dive into how contract disputes between businesses typically unfold in this state, this earlier post on navigating contract disputes between businesses in Indiana is a good starting point.
It is also worth knowing what kind of recovery is actually on the table. Indiana recognizes compensatory, consequential, and punitive damages, with compensatory damages aiming to restore the non-breaching party to the position they would have been in if the contract had been fully performed, and consequential damages covering losses that arise indirectly from the breach (so long as they were foreseeable at the time the agreement was made). Indiana also follows the American Rule, which means each side generally pays its own attorney fees unless a contract or statute provides otherwise. That matters a lot when deciding whether litigation makes economic sense. A fuller breakdown of what kinds of damages a business can recover in a breach of contract lawsuit is available on our blog for anyone trying to get a sense of what might actually be recoverable.
What if you are the one being accused?
Handshake disputes go both ways, and plenty of honest business owners in Indianapolis, Carmel, Fishers, and Noblesville find themselves on the receiving end of a claim they think is unfair. Maybe the other side is remembering the deal differently, maybe they are inflating what was owed, or maybe they are making something up entirely. The worst thing to do is ignore it, and the second worst is to fire off an angry response before thinking it through. If a claim has landed on your desk, the approach for handling a breach of contract claim against your business walks through the early moves that tend to matter most, and it is worth reading before doing anything else.
The lesson most people learn the hard way
If there is one takeaway here, it is this. The time to protect yourself is before the handshake, not after. A simple one-page written agreement, even something typed up on a phone and sent by email, prevents the vast majority of these disputes from ever happening. It does not have to be lawyerly. It has to name the parties, describe what is being exchanged, state the price or other consideration, and note the timeline. Five minutes of writing saves months of argument.
That said, the world is what it is, and plenty of good business in Indiana still gets done on a handshake. Anyone in the middle of a dispute right now is not out of options, and not the first central Indiana business owner to be in this spot.
If a handshake deal has gone south and the question is what to do next, call our office at 317-829-6797 or reach out through our contact form. We work with small business owners across Indianapolis, Fishers, Carmel, Noblesville, and the surrounding communities, and we are happy to take a look at the situation and give a straight answer about where things stand.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Reading this article does not create an attorney-client relationship. For legal advice tailored to your situation, please contact our firm directly.