Two weeks ago, on coming to an agreement with a new client, sealed with a handshake, I indicated I would send him a letter  that outlined our agreement. Pretty standard practice in my industry, but his response surprised me.

He asked ” do we need our agreement in writing because you do not trust me, or is it because you do not warrant my trust?”

Recovering from that was interesting, and it remined me that trust, emerging from the behaviour of the parties, is the basis of all successful demand chains. 

Contracts codify expected behavior, and specify what is allowed, and what is not. By inference, if it is not stated as being banned, it is OK, and vice versa. 

What does that do to the very basis of successful and mutually beneficial relationships: trust?

If you cannot trust someone, having a contract will not change that, it just outlines the basis on which the sanctions will be applied.