Learn whether your contract or agreement needs to be in writing to be enforceable or valid under the law from a contract lawyer and business attorney.
January 4, 2020
Whether a contract or agreement must be in writing to be valid or enforceable is critical. Many people believe or assume that a contract must be signed in writing to be valid or enforceable. In fact, most attorneys will tell you to get any contracts or agreements in writing. As a contract and business lawyer and entertainment and sports attorney, I'm often asked if a contract should be in writing or not. In this post, we'll discuss if or when you might need you agreement or contract to be in writing and why.
No, not all contracts must be in writing to be legally valid or enforceable.
Contracts are entered into everyday, by almost every adult, often without most of us even thinking about it or realizing it. Whether you're buying fuel for your car, groceries or meals at a market or restaurant, or shopping online or in a retail or other store, you're technically entering into a binding contract.
A contract generally requires nothing more than an offer, an acceptance of the offer, and something the law calls "consideration".
Consideration simply means an exchange or bargain that each party in the contract agrees to either do something they're not already required to do, or not do something they have a right to do. For example, I agree to pay you $100.00 and you agree to give me a new pair of shoes. Another example could be, I agree to loan you my favorite vinyl album for the week and you agree that you will not talk about my bad haircut or ugly new shirt. Regardless, each of us, as parties to the contract, have agreed to do or not do something we could have but weren't required to do. Typically, with very rare exceptions, the value of the exchange or consideration doesn't matter. As you can imagine, the possibilities are almost endless, with the exception being you cannot enter into a contract to commit a crime or otherwise violate a law.
In addition to consideration, an offer and acceptance of the offer is also required for a contract or agreement to be valid. An offer requires mere communication of the major terms of the agreement and the intent to be bound to a contract upon acceptance. An acceptance must occur in the manner or form that the offering party required as communicated in the offer. Otherwise, acceptance can occur by simply performing. For example, if I tell you that if you paint my house, I'll give you my boat. If you don't respond verbally or in writing but instead you simply painted my house, that would likely qualify as an offer and acceptance.
Once there's an offer, acceptance, and consideration, a contract is entered into and is valid and enforceable. This is why contracts typically aren't required to be in writing, and can be verbal or written, and also as a result, we regularly enter into contracts even doing the most mundane activities or making routine purchases. This doesn't mean however, that a contract must never be in writing to be valid or enforceable.
Some contracts or agreements must be in writing to be valid or enforceable.
While most contracts don't have to be in writing for the reasons discussed above, sometimes the law requires a contract to be in writing to be valid or enforceable. The law requires some types of contracts to be in writing in an effort to protect the public at large or the parties involved from potential fraudulent contracts, and to eliminate the confusion, disputes, or litigation, and the often resulting unnecessary time and expenses, that can occur, especially when contracts or certain types are not in writing. As a result, most states have enacted what are referred to as their statute of frauds that defines which types of contracts must be in writing.
So what types of contracts must be in writing in order to be valid or enforceable under the statute of frauds?
There are generally six types of contracts or agreements that are required to be in writing to be valid under most state's statute of frauds, including Tennessee. These six types of contracts include:
Contracts involving the sale, transfer, or rights in land or real estate
Contracts for the sale of goods over $500.00
Contracts that last more or cannot be completed in 1 year or less
Prenuptial agreements or contracts involving marriage as consideration
Contracts involving surety or guarantors, including guarantees to pay for another's debts, mortgages, or vehicle or other loans in the event they can't of fail to pay
Contracts where the executor of a will agrees to personally pay for the estate's or deceased's remaining debts
As you can see, these six categories can require a large amount of contracts to be in writing. In addition, it is often better and safer for everyone, as most attorneys will advise, to get any contract or agreement in writing. Not only does it make it more likely to eliminate potential confusion or disputes, it's also often very difficult to prove the existence or terms of a verbal or oral contract or agreement. As a result, it's often risky and unnecessary to rely on a verbal or oral contract especially when a written one can quickly and easily be drafted and agreed to. Regardless, a contract attorney or business lawyer can determine and advise you on whether you need or should have a written contract and assist you with drafting or negotiating any written agreements.
If you want any additional information whether a contract or agreement needs to be in writing, including if you need legal assistance or advice and representation involving your own or your business's or company's contracts or agreements, please contact us at The Fruitful Firm anytime.
Zach Scott Gainous is an contract lawyer and business attorney in Nashville, and the founder and managing attorney of Nashville contract and business law firm The Fruitful Firm. Zach regularly provides legal expertise, advice and representation to talented entertainers, celebrities, athletes, public figures, entrepreneurs, professionals, companies, and creators in music, film and television, sports, entertainment, fashion, media, technology, and more.
Disclaimer: This article or post is not and should not be considered or used as a substitute for legal advice or the hiring of an attorney. You should always carefully seek out legal advice and representation from a qualified attorney to assist you with your legal matters and issues.