Is A Contract Enforceable If Only One Side Signs It?
Let’s say that you have a small business fixing computers. A company hires you. They send you a contract, but you miss it or get busy, and you don’t sign it. You do show up and do the work. The company later doesn’t pay you, or pays you less than agreed, based on the fact that there was no signed agreement.
Or, let’s say you are the company hiring the computer repairman. You send them an agreement, and they sign. They then disappear, and say you’re concerned that you can’t enforce the contract because you never signed it—only they did.
Are these enforceable contracts? In both situations, only one party to the contract signed the agreement. Is that an enforceable agreement?
Actions Matter More Than Signatures
Actually, they both may be. Contrary to popular belief, a contract doesn’t have to be signed to be enforceable.
In fact, in many situations, you don’t need a written contract at all—oral contracts are enforceable (absent a few, specific situations where a contract has to be in writing). Taking it a step further, you don’t always even need a contract—legal theories like promissory estoppel or unjust enrichment can form a legally enforceable agreement.
But what about an actual written contract that only one party signs? Well, these are enforceable, with the right level of certainty or intent—that is, the party that didn’t sign, must have done something to show an understanding of, and acceptance of, the terms of the agreement.
Real Life Applications
You actually do this all the time. Think of a website’s terms of service, which you sign, but the website or site owner doesn’t. Or, think of the signs that are often posted in parking garages, where the garage basically tells you what your rights are, and that you agree to them just by the act of parking in the garage.
Courts Look to How Parties Behave
Courts will look to the behavior of the parties, and possibly extrinsic evidence like emails or other communications, to see if the parties read, understood, and were acting in accordance with the contract, such that their actions show they were accepting the terms of the contract.
The agreement must still have the vital and enforceable elements of a contract – for example, a definite and complete offer, and consideration (that is, parties get something and give up something).
There is one exception to this rule, that not all parties have to sign an agreement for it to be valid: if the terms of the agreement specifically say that it is only valid when all parties sign, or that it isn’t valid until all parties sign, then the signature of all parties must appear on the agreement.
Your contracts are the heart of your business. Make sure they’re done right and that they’re enforceable. Call the West Palm Beach commercial litigation attorneys at Pike & Lustig today for help.