Written contracts have several advantages over oral ones, but just because a contract is written doesn’t mean it’s enforceable, and you may need to comply with a contract only made verbally. Contract law is state-specific, so it may depend on which laws apply.  Our friends at Focus Law LA discuss contracts in more depth below.

What’s A Contract?

A contract is a legally enforceable agreement creating a duty or responsibility for the parties involved. It can involve an obligation to do or refrain from doing something they otherwise have a right to do. It normally involves one party doing or not doing something in exchange for the other party doing or not doing something.

What Makes A Contract Enforceable?

This can vary depending on state laws, but generally, what’s required includes the following:

• An offer by one party to another that can be met with an acceptance or a rejection with or without a counteroffer. The offer must be specific enough so the other party understands what they need to do in return
• Acceptance of an offer or counteroffer. There must be a “meeting of the minds” of the parties as to their rights and obligations
• An exchange by both parties of something valuable. This can be doing something (paying money) or a promise not to do something (not sue the other party)
• Legal capacity by the parties involved. They must be old enough (often at least 18) and be of sound enough mind to understand what’s going on and what’s being exchanged
• There must be a legal purpose. A contract to smuggle goods or sell stolen cars isn’t enforceable. States also have statutes of fraud that mandate some contracts can only be in writing to be valid, like a contract to sell real estate 

Contracts could be written, oral, or implied by the actions or behavior of the parties and the circumstances of what’s going on.

What Are The Differences Between A Written And Oral Contract?

The terms of and agreement to the contract are written down or made verbally. The elements of an enforceable contract apply to both kinds.

Why Is A Written Contract Better Than An Oral One?

Depending on the subject matter and the applicable statute of frauds, a verbal contract may be unenforceable. An oral contract relies on the memories and good faith of the parties involved. There may be disputes about who promised what to whom in exchange for what. This would all be stated in a written contract, so it’s much harder for one party to back out or change the terms. 

It’s much easier to prove the existence and terms of a written agreement. When a contract is written and signed, a court normally assumes it covers the entire agreement. Written offers, counteroffers, and acceptances should also prompt the parties to think more about the proposed contract’s subject, conditions that must be met, and whether the agreement is in their best interests.

If you have questions about forming or interpreting a contract or whether a contract binds you or another party, talk to your partnership dispute lawyer.