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Many people operate under the mistaken belief that the word “contract” is
synonymous with “written contract”.
Everyone has the warning “get it in writing”. As a general proposition it
is good advice.
You should automatically not assume, however, that because an agreement is not in writing,
it is not a contract or that you cannot legally enforce it.
Under our law there are a number of contracts that must be in writing to be enforceable,
such as a sale of real estate or a long-term lease.
Other examples exist, but there are also numerous exceptions to the rules requiring
written contracts.
For example, when one party to a contract has performed the obligations that were expected
of him or her under a contract that should have been in writing, the other party cannot
generally raise the written contract rule as a defence against the obligation to pay
for the other person’s performance.
In order words, if one party actually did what he or she agreed to do, the other party
cannot object the contract was only verbal.
Obviously, it is much easier to determine the obligations of each party to a contract
if the contract is in writing.
There is less likely to be confusion or misunderstanding when the agreement is reduced
to writing.
In addition, an oral agreement often comes down to one person’s word against the
other’s over important terms of the agreement, or whether an agreement existed
at all.
You should remember, however, that although a written contract is required for some
transactions, and also provides an independent way to determine the precise terms of
a contract, a written contract is not necessarily required in order to have a valid,
enforceable agreement.
The adage that an oral agreement is “only as good as the paper on which it is
written” may suggest some sound advice, but it should not be interpreted to mean
that an oral agreement is equivalent to no agreement.
Many “deals” are still made with a handshake, and although problems of proof
may increase, do not assume you have no legal recourse because you didn’t “get
it in writing."
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