A handshake agreement is an informal agreement between two or more parties, typically made through a handshake rather than a written contract. It signifies mutual consent and trust, often used in personal or small business dealings. While it can be a quick way to establish terms, it may lack legal enforceability. These agreements are common in situations where parties have a strong relationship or when the terms are simple and straightforward. However, because they are not documented, misunderstandings can arise, making it important for parties to communicate clearly and ensure they are on the same page regarding their commitments.