Last year, NFL quarterback Baker Mayfield signed a $100 million, three-year contract with the Tampa Bay Buccaneers. Undoubtedly, that agreement was thoroughly and thoughtfully negotiated and then memorialized in a detailed, written, legally binding, and enforceable contract. But it appears that Mayfield may not have been as careful in his dealings with his father’s company. As stated in a 2024 lawsuit filed in U.S. District Court in Texas, Mayfield alleges that between 2018 and 2021, his father’s company wrongfully transferred $12 million from him and his wife’s personal accounts to his own company without their knowledge or consent, allegedly to cover the company’s operational expenses. Mayfield’s father transferred the amounts under the mistaken belief that he was not required to pay his son back.
The star QB wouldn’t be the first person to get into a dispute with a family member or close friend over money or accuse a loved one of breaking a promise. Unfortunately, this scenario occurs frequently and can lead to litigation and, worse, fractured relationships. For example, a child requires financial assistance from their parents to make a down payment on a dream home, siblings agree to split the expenses of caring for their elderly mother or father, or childhood friends decide to leave their employment to buy a food truck and launch a restaurant business. All these scenarios can work out well, with a short-term loan repaid in full, costs split and paid down the middle without any hassle, or lead to a successful and thriving business.
However, as with any agreement, those between family members and friends can go south and lead to disputes or even litigation. For example, t parties may have different interpretations of what was agreed to, or one may allege that the other isn’t meeting their obligations or has made certain promises that are not being upheld. Given the close relationship of the parties, family members or friends often fail to formally memorialize their agreements in writing which can lead to confusion and ambiguity concerning the parties obligations. While family ties may be binding, a handshake or hug may not be, at least in the eyes of the law.
Mayfield’s experience illustrates the critical importance of memorializing agreements, even those between family members or friends — just as one would when buying a home, entering into a partnership agreement, or signing a nine-figure deal with an NFL team.
Trust, But Verify In Writing
Family relationships are often built on trust, love, and mutual understanding. However, when it comes to agreements — whether financial, property-related, or concerning caregiving responsibilities –verbal and informal promises can lead to misunderstandings, disputes, and even fractured relationships. While formalizing agreements with loved ones or friends may seem unnecessary or even uncomfortable, reducing agreements to writing is a crucial step in ensuring clarity, accountability, and legal protection.
Similarly, while the law sometimes recognizes oral agreements as binding and enforceable, the lack of a written document setting out the material terms of the agreement can make it difficult, if not impossible, for a judge or jury to determine what exactly the parties agreed to. And if such a “meeting of the minds” cannot be proven, a court will find that there is simply no agreement to be enforced.
For example, if a family member lends a significant sum of money to another, the lack of documentation may lead to a dispute in which the lender alleges the arrangement was a loan while the borrower insists that the money was a gift they weren’t expected to repay. A written agreement specifying repayment terms would have removed any doubt, while the lack of one will leave too much doubt for a judge or jury to find there was a “meeting of the minds.”
Again, there is nothing inherently wrong with entering into a financial agreement or arrangement with a family member or close friend. In fact, entering into a financial agreement or business venture with a family member or friend is a common practice and can be done without issue when approached with transparency, clearly defined terms, and proper documentation. However, unless you want your Thanksgiving turkey to be served with a side of litigation, one must be sure to memorialize and clearly define the scope of agreements in writing, even those with a family member or friend.
If you would like assistance documenting or formalizing an intrafamily agreement, please contact Gabriel Blum at Ansell Grimm & Aaron.
