It isn’t necessary for all contracts to be in writing for it to be valid or enforceable. However, there are certain contracts that need to be written. What type of contract should be in writing?
The law provides under the statute of frauds, certain situations which may require a contract to be written for it to become enforceable. It is clear that not every contract should be written. Oral contracts also have a legally binding effect on the parties. According to the law of contract, for a contract to be valid and binding on parties, it must have the following elements:
• There must be an offer
• The acceptance of the offer by another party
• Consideration for received by both parties in the contract.
If your contract has these three elements, then it would be valid regardless of whether or not it is in writing. The law provides the conditions for a law to be in writing to qualify as a legal obligation enforceable in court. Contracts that are not going to be completed within one year must be written.
For instance, in distribution contracts that are meant to extend beyond one year, they should be in writing. Also, the law provides that contracts between parties buying or selling real estate property must also be in writing to be valid.
It is not sufficient to rely on the verbal promise of a landlord that he/she will offer the property to you for sale which you are currently leasing. Another contract that should be in writing contracts securing the debt of another party. The court can only enforce it if it is in writing.
There are also certain contracts that must be enforceable especially for sales of goods and services that amount to a certain minimum amount. You need the guidance of a legal practitioner, to know for certain which of the contracts are best written out and also how to couch their terms in a contract agreement.
Even though some contracts should not be compulsorily in writing, it is still useful to have them in writing especially to prevent litigation. By writing out the terms of agreement down on paper, it would help both parties understand themselves better and their obligations.
It would also prevent them from forgetting their obligations in the contract. Parties will know when they are to deliver their services and when payment is to be received. If the contract was verbal, there could always be an instance where a party forgets his obligation or where there will be a misinterpretation of what is expected of them.
When you have a verbal agreement, it poses a lot of problems. There is always bound to be a disagreement between the parties. When a disagreement occurs, it is more difficult to try to resolve the dispute because there are no spelling out terms to look at to rectify the issue.
However, if emails have been exchanged between the parties during correspondence, then it will be easier to point out the obligations of the parties in the contract. When a contract is verbal, there is a likely chance that one party will deny the terms agreed upon or even that there was an existing agreement at all.
If the matter is brought before the court, it would be difficult for an oral contract to stand as either party may not be able to prove beyond reasonable doubt that a contract ever existed.
You need the services of a lawyer to draft and negotiate the terms of your contracts that would help your business. There are lawyers that have experience and specialize in negotiating contract agreements for various businesses like construction, manufacturing, internet, retail etc.
We are ready here at Downham Chamber for your legal needs.