A contract is any legally-binding agreement made by two or more parties. What you don't know is that you get into more contracts than you think, sometimes without even knowing it! The most common myth in contract law is that a contract has to be written and signed for you it to be enforceable for or against you. In truth, very few contracts must be in writing to be legal, and even then, some don't have to be in signed hard copies to be enforceable.
This article discusses enforceability of contracts of all kinds, so that you're more aware what you do or say when dealing with other people, just in case your own words or actions are used against you in future.
1. Contracts don't have to be written by a lawyer, but they should
Contracts can be formed verbally or by exchanging letters, emails or messages of any sort. Of course, written words are more easily enforced because there's proof even if the other party reneges on their word. Verbal agreements are more difficult to prove, especially if you have no way to confirm who said what.
The rule of thumb is to get as many of your agreements in writing as possible, even with people you consider close friends/allies. You'll be surprised how fast people jump ship when the stakes are high. If writing your own contract, keep the language as simple as possible, and don't leave any spaces where things can be added later on. If you make any changes, all parties should initial or sign next to them and date when those changes were made. Finally, ensure that everyone bound by the contract has received a copy (if delivered far away, ask for a confirmation email or signed delivery note).
2. Verbal contracts have a high burden of proof
Verbal contracts are valid too; you just usually have a harder time proving they existed if they fall through. All contracts have three elements: offer, unqualified acceptance (unconditional agreement to the terms; if there's a condition attached, acceptance hasn't been reached) and consideration (an existing exchange for both/all parties).
When you have no proof of a verbal contract (witnesses, secondary documents etc.), a verbal contract's existence is proven through the actions of both parties following the alleged agreement. For instance, if you go to a doctor and are treated, you're expected to pay at the end, even without a contract stipulating this.
That said, some contracts must be written to be valid, such as purchase or sale of property, IOUs and long-term contracts (where parties are bound by the terms for more than one year). It is always advisable that these contracts be drafted and/or verified by your lawyer before you sign them, so that they can advise you on the full scope of your rights and responsibilities.
3. Contracts don't have to be signed
In general, contracts that are signed are enforceable, whether or not you read the contract. It is possible to void these contracts, too, but that takes a judge and a long-winded court process. For example, clicking "I agree" to a website or software's terms and conditions binds you to those terms, even if you don't read them.
Some contracts must have signatures to be binding, like loan guarantees. However, when a contract isn't signed, agreement is proven by the person taking an action stipulated in the contract. For example, for a work contract, beginning work can be seen as proof that you agree to contract terms, even if you don't sign the contract.
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