Oral (verbal) agreements
Many oral (verbal) agreements are binding on the parties.
Most agreements are reached, when the parties have a good sense about each other.
In fact, the idea that one party may want to put the agreement in writing, may even seem as though the requesting party does not trust the other party.
You have probably heard expressions like; “I do all my deals on a hand shake” or “ a contract isn’t worth the paper it’s written on.”
So why put agreements in writing?
The obvious answer is that it protects you, if the other party goes back on his/her word. This is certainly the most important reason to have a contract in writing.
The problem with this answer is that it does not take into account “misunderstandings,” where both parties believe they are right.
Consider for a moment how often you have had misunderstandings with friends over simple, social arrangenments. If that is the case then how much more likely is it for their to be a misunderstanding in a contract that has been negotiated?
The terms of contracts, even “simple” contracts, come about through discussions (negotiations), where each party interprets the contract in their own favor.
So when misunderstandings occur this leads to litigation which is expensive, time consuming and often leaves both parties unhappy in the end.
Any well drafted contract will set out all the terms of the agreement and then have a clause, which says that the written agreement is the ONLY agreement between the parties and that any other promisesor representations that are not in writing will not be binding on the parties.
What if both parties understand the contract in exactly the same way?
Usually when people enter into oral contracts they agree on what each party must do, but they avoid dealing with the rights of each party if one of the parties breaches the agreement. In other words, what recourse does each party have under the agreement if the other party fails to carry out their side of the deal.
If there is no agreement on the remedies that are available to each of the parties in the event of a breach of contract, the Law provides the remedies. Unfortunately these legal remedies, which the Law provides are “one size fits all” solutions, which are often inadequate or unacceptable to the person who has been wronged.
A complete contract will include the remedies that are available to each party in the case of a breach of contract by the other party.
Costs of contracts.
There is a huge difference between the cost of a written contract and the valueof a written contract.
The cost of a contract is the price. The value of a written contract is the benefitof having a well drafted written contract, which explains both parties expectations and recourse if there is a breach.
What about contracts that can be purchased cheaply on the Internet?
The answer to this is the same answer to purchasing anything that is cheap. Are you getting value for the price or are you just wasting your money and setting yourself up for trouble down the road?
Legal services are services and not commodities. If a person can get a cheaper price for the same brand T.V. or a VideoCam at different stores, it is obvious that price is the determining factor. However, legal services are an entirely different issue. The “quality” of the same agreement, which is prepared by different attorneys will differ from one attorney to the next, even though the attorneys are given the exact same facts.
If this is the case then what can you expect from an agreement that is a “one size fits all agreement” that is purchased off the Internet?
If you want to protect your interests in your business and personal life, you want your agreement to reflect your specific needs based on your particular circumstances and not settle for a “one size fits all” agreement.
Types of Agreements
You may use the exact same agreement on different occasions, but that very agreement must reflect your own business needs.
For example, if you work with independent sales representatives, the same agreement will probably be used for all your representatives. Yet you want the agreement to reflect your special requirements.
Then there are those agreements that are specific to one situation. For example. a partnership agreement. In this case the terms will be unique to that particular partnership.
Our Law Firm
In the area of business law we prepare contracts for different situations. This includes reviewing and negotiating contracts on behalf of our clients.
Here is a list of some of those contracts:
Sales and Purchases of businesses;
Agreements between Stockholders;
Merger and Acquisition contracts;
Joint Venture Agreements;
Sale of Stock Contracts;
Employee contracts, including Management contracts;
Dissolution of Partnership arrangements;
Affiliate Contracts for the Internet;
Independent Contractor agreements;