When Does a Contract Have to Be in Writing?
In general, both written and oral contracts are enforceable. However, most states have laws which require certain types of contracts to be in writing. These laws are called “Statute of Frauds” laws because their purpose is to prevent fraudulent claims. Statute of Frauds laws will vary from state to state, but some common examples of contracts that require a signed writing are: - Contracts involving the sale or transfer of land
- Promises to pay someone’s debt obligations
- Contracts that cannot be completed within one year of their making, according to the terms of the contract
- Contracts involving the sale of goods for more than $500
- Contracts that will go beyond the lifetime of the one performing the contract
What Must the Writing Include?Again, the laws will from state to state. Typically, however, the writing should: - Identify the parties entering into the contract
- Make the contract identifiable by spelling out the subject-matter
- Give the fundamental terms and conditions of the parties’ agreement
If the contract is for the sale of goods, it will only require that the writing is signed by the party to be charged (the party trying to get out of the contract), and that it include a term regarding quantity of the goods. You should note that even when a written contract is not required, it is a good idea to have one anyway. It may be difficult to prove that an oral agreement existed, and there may remain questions regarding the terms of the agreement. What if a Written Contract is Required and I Don’t Have One?You may still be able to enforce the contract if you have partially performed, or if you detrimentally relied on the other party’s promise. Do I Need an Attorney to Write a Contract?A contract is enforceable even if an attorney doesn’t draft the contract. However, an experienced contracts attorney will be able to make sure the contract you draft is legally binding and in the manner of your understanding. An experienced contracts attorney will also help explain the consequences and responsibilities of entering into the contract. |
