Handshakes have historically represented trust, honesty, commitment and reliability, even without signing a legal document. Handshakes hold a psychological component, as they form an immediate connection between people, symbolizing a commitment. Additionally, handshakes are often used as a customary practice across different cultures.

On the other hand, a contract is an official legally-binding agreement between two or more parties, defining specific terms, responsibilities, obligations and consequences for any breaches. A contract, therefore, carries legal weight and can be enforced by law, offering legal protection to all parties involved.

The reliability of a handshake depends on the integrity of the individual or organization involved, while the reliability of a contract is based on the legal enforcement and consequences associated with it.

In situations where trust and integrity are established, a handshake may suffice as a confirmation of agreement. However, if the transaction is complex or involves high stakes, it is advisable to create a formal contract to ensure legal protection and clarity of understanding for both parties.