Types of Written Contracts: Everything You Need to Know
While these contracts are not immediately seen as null and void if they are not in writing, they can be considered voidable if the only contractual agreement was made verbally.3 min read
There are many types of written contracts, and many contracts are legally required to be in writing in order to be considered valid and enforceable. Among them are:
- Land contracts. As the name implies, land contracts are legally binding agreements between two or more parties regarding the sale of land, and must be in writing. Land contracts may include the purchase of land or real estate, the mineral rights within land, and mortgage agreements. However, should there be a lease agreement for under a 12-month period, then some states waive the requirement of a written contract.
- Sale of goods that exceed $500 in value. Per the Uniform Commercial Code, if goods are being sold for over $500, then there must be a written contract in place.
- Contracts that are to last more than one year. If entering into a contractual agreement with a person or party that is to last beyond one year, then a written contract is required. An exception to this would be if there is an indefinite time frame attached to the contract. For example, if you are hired to plan a wedding that is scheduled for 18 months in the future, then you will need to have a written contract in place, whereas if you are hired to write articles for a magazine on an ongoing basis without a set deadline, then (while a contract would be advisable) a written contract is not legally necessary. Contracts that have an indefinite time frame do not fall under the Statute of Frauds.
- Contracts that hold you responsible for someone else’s debt. If you are cosigning a loan or in anyway agreeing to take on the debt accrued by someone else, then the contract will need to be in writing. The exception to this is if you make the promise to pay to the debtor, rather than the creditor. For example, if you are making a promise to pay someone’s credit card and that promise is being made to the financial institution (the creditor), then the agreement must be in writing, whereas if you are simply assuring the person who is carrying the debt that you will pay their bill, then a written contract is not required.
- Contracts related to a marriage. This can include prenupitual agreements, the marriage license, and divorce agreements.
While these contracts are not immediately seen as null and void if they are not in writing, they can be considered voidable if the only contractual agreement was made verbally.
What Should Be Included
Even if the type of contract you are entering into is not required to be in writing, it is advisable that you obtain written contracts to alleviate the potential of miscommunication or misunderstanding, down the road. Additionally, should there be a breach of contract, having everything in writing can help the courts make the best determination.
To ensure your written contracts are enforceable, make sure they provide the following information:
- The basic terms and conditions of the agreement, agreed upon by all involved parties
- The names and contact information of all the parties to be involved in the execution of the contract
- Clearly spelling out the duties to be fulfilled and any payment involved
Consulting with an attorney who has an expertise in contract law can be of benefit to all parties involved, as it ensures that you are clear on the parameters of the contract prior to signing it, while also ensuring it’s drafted in a way that is both clear and enforceable.
Requirements for Writing a Contract
While the laws may vary from state to state regarding the specifics of how one drafts a legally binding contract and what needs to be included, there are always going to be certain requirements that must be observed. Fortunately, it is easy enough to find out the various requirements in your state by contacting either your attorney or your state’s Small Business Administration.
In addition to the previously mentioned details that will always need to be included in a contract, many times contracts will also spell out the action that can be taken, should there be a breach of contract, and the timeframe in which that action can be taken. For example, if you agree to pay a certain amount by a certain date, and you fail to do so, the contract may state that the non-breaching party will provide a grace period of one month, after which time they may pursue means by which to collect the debt.
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