Oral Contracts are Enforceable…Sometimes….
If you want an agreement to be enforceable, put it in writing. That’s what they say, and it is certainly true. But contrary to what a lot of people believe, an agreement can be enforceable, even if it’s not in writing.
Why A Writing is Better
Of course, having something in writing is always the best practice. It avoids confusion, spells out the details of the agreement, sets damage amounts, and contains all the details of your agreement. Compare that to an oral agreement, which may only be a few sentences.
Oral agreements leave out a lot of details, and leaves open the door to a lot of lawsuits. However, the fact remains that oral contracts are valid, enforceable agreements, regardless of the proof problems that happen when trying to enforce them, such as, “who said what and how?”
When Oral Agreements are Not Enforceable
But there are some categories of agreement that cannot be oral, and which require a written agreement. It doesn’t have to be a fancy agreement—writing in a text message, email or on a cocktail napkin is fine (if sometimes incomplete)—but there must be writing nonetheless.
The following are the kids of agreements that require some form of writing:
Paying the debt of someone else – Let’s say you agree that you will be responsible for a friend’s medical debt. Or, that your business will pay the debts of another business, as part of an incentive for that company to do business with you. Anytime Party A says that it will pay a debt or obligation owed or which could be owed by Party B, the agreement must be in writing.
Marriage – Any promise to do something in return for getting married, must be in writing. These agreements do happen. Imagine for example a couple that agrees to get married, on the condition that they both share in the operation of a business.
Sale of Land – Any sale of property must be in writing. This includes the lease of any property where the lease is for more than a year.
Medical Guarantees – Any guarantee made by a health care provider that assures the results of certain medical procedures.
Expensive Goods – The sale of any property or goods where the property sold is worth more than $500, must be in writing.
Contracts that Can’t be Performed in 1 Year – The question here isn’t whether the contract will be performed in a year, or whether it is intended to be. The question is whether it is even possible to perform the contract in a year. If it is not, the agreement must be in writing.
For example, if you paint my home and in return, I agree to pay for your child’s college, and your child is now 12, that contract cannot be completed in a year.
Call the West Palm Beach business litigation lawyers at Pike & Lustig to help you with your contractual business needs or with any business law problem that you may have.