Three Reasons You Should Write Out Your Contract


You May Be Able to Enforce Unwritten Agreements, But It Won’t Be As Easy

Whether for work, a sale, or any other official deal between two parties, we’re all guaranteed to deal with contracts of various forms throughout our lives. Legally speaking, a contractis “[a]n agreement between two or more persons [that] creates an obligation to do or not to do a particular thing.” Although contracts can be oral or written, there are several advantages to laying out the terms of your agreement in a document for all parties to sign.

Verify the Details of the Agreement

A written contract provides confirmation of the existence and details of an agreement. If you make a verbal contract, anyone involved could forget some of the terms. They might also change their mind and try to back out, and with no documentation of their prior agreement, enforcement may be a challenge.

A written contract gives you a document you can reference if the other party changes their mind or refuses to honor the original agreement. This can be helpful when addressing expectations in a private conversation or in the event you need legal intervention to make the other party follow through.

Prevent Misunderstandings

A written contract outlines the rights and expectations that apply to each party. Having this clarity for each signatory makes the contract easier to fulfill without issue. Oral contracts typically do not provide such details and therefore leave too many open questions. Parties may attach different meanings to the same term or assume something that is not clearly stated, which can cause significant misunderstandings.

If you are working on an important contract, you may want to speak with an attorney to ensure it is drafted clearly and concisely, leaving no room for ambiguity.

Court Enforcement

A valid written contract will provide you with a document the court can enforce if the other party fails to hold up their end of the bargain. Oral agreements are much harder to prove because a dispute will simply pit parties who are in disagreement against each other in a “he said, she said” situation. Though contracts may only apply to the people who sign them, keep in mind that you may need a third party to help mediate or enforce your agreement if things go sour.

Be Smart When It Comes to Contracts

At the end of the day, a handshake and taking someone’s word for it is simply not enough. Though a contract may seem like it takes more time and hassle upfront, writing one can prevent misunderstandings and disagreements down the road.

This is the first of a four-part series on contracts. The next blog will discuss how to form a valid contract under Michigan law.

If you have questions about contract law, our attorneys are here to help: Call us at (888) 211-5798 for your free consultation.

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