• James D. Lynch

Contract Tip - Must a Contract be in Writing?

We have all seen formal contracts, with terms in small print and paragraphs that begin with words like “wherefore.” However, this is not required for a contract to be legally enforceable. In order to have a valid contract, there only needs to be a few elements: 1) an offer by one party, 2) an acceptance by the other party, and 3) something of value that each party exchanges with the other (known as “consideration”). A writing is NOT one of these requirements. Therefore, a verbal (oral) contract is just as enforceable as a written contract, as long as it has the above three elements.

However, the Statute of Frauds requires certain types of contracts to be in writing. Examples of contracts that must be in writing include:

● Contracts for the sale of an interest in real property. ● Contracts for the sale of goods of $500 or more. ● Contracts in consideration of marriage (such as prenuptial agreements). ● Contracts that cannot be fully completed within one year of the making of the contract. ● Contracts involving a promise to pay another person’s debt (known as “surety contracts”).

As long as the contract is not within the Statute of Frauds or another state law requiring a writing, there is no legal requirement to have the contract in writing. However, the best practice is to put all contracts in writing. A verbal contract is difficult to prove. Since there is no writing, the person must find other evidence to prove that the contract existed in the first place. Further, a verbal contract is difficult to enforce because the terms of the contract were not written down. To be on the safe side, putting the contract in a signed writing is the best way to protect both parties.

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