Why Contracts Should Be in Writing

In a perfect world, the old-fashioned “gentleman’s agreement,” sealed with a word and handshake, would be enough to establish the binding nature of a contract. However, this is not an ideal world and both fraud and misunderstanding abound. This is why we now have the convention of written contracts and the roles of contract attorneys to ensure that all parties of a particular agreement can get what they are entitled to while also fulfilling all of their obligations.


Even with the best of intentions

Setting aside the risk of fraud, there is also a possibility with a verbal agreement that the parties involved may misunderstand the terms and this will likely lead to disagreements at a later stage. Since there is no written record of the agreement, it is very difficult for a third party to adjudicate the matter. A written contract, on the other hand, lays down everything that is agreed on in clear terms that can be referred back to at a later stage if necessary.


The Statute of Frauds

The basis for the modern practice of written contracts goes back to a 1677 English law called the Statute of Frauds. This simply required a written agreement, signed by all parties, to act as proof for the agreement made around any undertaking, be it a sale of goods or a joint business venture. Today in the United States, we have the Uniform Commercial Code – adopted by 48 states, including California – which is essentially an updated version of the Statute of Frauds. This dictates the enforcement of contracts and sets specific guidelines by which contracts should be drawn up.


Contracts that are required to be in writing

Having said all that, there are some contracts that can still be verbal and considered legally binding; they are simply more difficult to enforce. On the other hand, certain contracts are absolutely required by law to be in writing in order to be enforceable. These include the following:


  • Real estate sales
  • Any contract that takes longer than one year to complete
  • Agreements to pay someone else’s debts
  • Real estate leases
  • Contracts involving an amount of money above a certain threshold
  • Contracts extending beyond the lifetime of any of the parties
  • A transfer of property to be carried out after the owner’s death.


When it comes to business contracts or corporate contracts, there is simply too much at stake to leave it to chance. Verbal agreements amount to leaving everything up to fate. A written contract provides peace of mind, specific rules and a record that can be referred to in the event of a dispute. If you need a contract attorney to draw up a contract for you, or to assist in a matter of possible contract breach, contact The Law office of Stephen M. Beckwith, an experienced lawyer specializing in all areas of business law. Serving as a contract lawyer in Sonoma County for more than 27 years, Stephen M. Beckwith is well equipped to handle any matter relating to contract law.