This article by Richard Booker is a good abbreviated summary of ancient covenant practices. These practices were also used when business partnerships were established. There is much more that could be written, but this short simplified outline is useful to increase our understanding.
"What is a Covenant?
From the beginning of time, people have understood a covenant to be a binding agreement between two parties. The word "covenant" actually means to "cut a covenant by the shedding of blood." A blood covenant has always been considered the most sacred of all compacts. When you enter into blood covenant with someone, you promise to give him or her your life, your love and your protection forever.
The Covenant Ritual
In ancient times, people expressed their covenant relationship in a dramatic way. they would exchange their coat or robe, which represented themselves, as a means of mutually committing their lives to one another. Then they would exchange their belts. Because the belt held their weapons in place, it symbolized their power. By exchanging it, they were pledging their strength, support, protection and ability to fight for and defend one another.
Next, the two parties would actually "cut the covenant" by killing an animal and splitting it down the middle. the bloody halves of the animal represented the two people making the covenant. They would then make the covenant walk between the pieces of flesh. by this act, they were showing their willingness to give up the rights to their own lives and begin a new walk with their covenant partner unto death.
After cutting the covenant, they would raise their right arms, cut their palms, and bring them together to intermingle their blood [Example: blood brothers]. As their blood intermingled, they believed their lives were intermingling and becoming one, taking on the nature of their blood covenant partner.
Following this, they would exchange names as a means of identifying with one another. As they were now known by each others name, the would be expected to think, talk, and act like their blood covenant partner.
The next step was to make a scar over the cut as a permanent testimony to the covenant. It would always be there as a guarantee, reminding the two parties of their covenant rights and responsibilities.
They would then give the terms of the covenant, pledging to commit their assists to one another and taking responsibility for the other's liabilities.
Next, they would have a memorial meal to symbolize their covenant union. They would take a loaf of bread and break it in two and feed it to each other. Then they would serve each other wine. The bread and wine represented their lives. By exchanging them, the two parties were expressing their desire to become one with each other.
Finally, they would leave a memorial to the covenant by planting a tree which they sprinkled with the blood of the animal. The blood-sprinkled tree, along with the scar, was a lasting testimony to their sacred covenant relationship."