When it comes to contracts, many of us would like to think that a good old-fashioned handshake is enough to seal the deal, but unfortunately that is not the case. Although some contracts that are unwritten can be enforced in a California courtroom, many of them cannot. Some contracts, such as purchase and sale of real estate, must be in writing.
With that being said, there are still plenty of reasons why you would not want to rely solely on an unwritten contract. An experienced attorney can assist you in creating custom contracts that will save you a lot of headaches. Here are the top reasons why you want to put it in writing and not rely on an unwritten contract.
Hard to Prove: If you ever have to file a claim to enforce a contract that is not in writing, you will have to work much harder to prove and win your case. Essentially, you will have to rely on testimony of the people who agreed to the oral contract or the people who conducted and created the contract. If enough time has elapsed, trying to find witnesses for court can be much more difficult as memories fade over time. Simply having a written contract to pull out of a file is much simpler.
Oral Testimony Leaves Your Business at Risk: When a contract is not written, proof of the contract will be based on testimony, and the unfortunate fact is that testimony can be inconsistent. When inconsistency occurs, a jury or judge will have to try to determine whose memory is better. This puts your business at risk for an adverse decision. With a written contract, there is no dispute about memory because all of the terms are in writing. Any dispute would be about how the words should be interpreted which is much less risky both financially and legally.
Necessary Contingencies Rarely Covered: All contracts are unique, which means that a well-written contract will attempt to cover any foreseeable contingencies. For example, what if a raw material or something in the supply chain becomes unavailable? A written contract may be able to cover this issue and allow the contract more time to be completed, declare the contract void, or some other type of resolution.
Missing Boilerplate Provisions: When an experienced attorney creates a written contract, boilerplate provisions will be added for legitimate business and legal reasons. Although these provisions typically have a bad name among non-attorneys, they do not deserve their bad name. These provisions may include things such as which state will govern the contract. This can be important if the parties involved are from different states because each state has different laws.
Contact a Business Law Attorney
If you are in the process of creating a contract, you need the assistance of an experienced attorney. The attorneys at Verhagen Bennett LLP will ensure that your contract is drafted to protect your best interests and those of your business. Contact us today to schedule a consultation.
© 2019 Verhagen Bennett LLP — This article is for general information only. The information presented should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.