1. How Written Contracts Become Bad Debts?
2. The Statute of Limitations On Written Contracts 
3. What Is the Writing Requirement for Contracts?
4. What Types of Contracts Are Required to Be In Writing? 

Updated November 4, 2020:

What is a written contract? A written contract is a printed agreement between two parties, one a lender and one a borrower. Written contracts are not only legally binding documents, but also more enforceable than an oral agreement. The basics of a written contract include one company agreeing to provide a product or service and the other party agreeing to payment terms for the purchase of it. 

Exchanges of correspondence where promises are made and deals are accepted, including such correspondence as memos, can still be considered a written contract, with or without a signature. Though most statutes regarding written contracts are limited to contracts that are signed by one or both of the parties entering the agreement. 

How Written Contracts Become Bad Debts?

A written contract becomes enforceable once it is signed. Once signed, if you default in the payment terms described in the contract, the other party will have the right to pursue legal action to demand payment for the money you owe. This could include filing a lawsuit to collect the remaining balance. If the court finds a judgment against the payee, the contracting party could file for wage garnishment or other methods to ensure the repayment of the debt. A judgment can be found as long as the contract still falls within the statute of limitations for debt. The statute of limitations will begin on the day the first late payment activity was recorded.

The Statute of Limitations On Written Contracts 

Every state has their own statute of limitations regarding a written contract. The number of years is often longer than is typical for open-end accounts, such as credit cards or lines of credit. If you find yourself under a lawsuit for a contract violation, it is important to consult with an attorney to prepare your defense, and determine the parameters involving the statute of limitations in your state. The statute of limitations for each state are as follow:

  • Alabama: 6 years
  • Alaska: 6 years
  • Arizona: 6 years
  • Arkansas: 6 years
  • California: 4 years
  • Colorado: 6 years
  • Connecticut: 6 years
  • Delaware: 3 years
  • Florida: 5 years
  • Georgia: 6 years
  • Hawaii: 6 years
  • Idaho: 5 years
  • Illinois: 10 years
  • Indiana: 10 years
  • Iowa: 10 years
  • Kansas: 6 years
  • Kentucky: 15 years
  • Louisiana: 10 years
  • Maine: 6 years
  • Maryland: 3 years
  • Massachusetts: 6 years
  • Michigan: 6 years
  • Minnesota: 6 years
  • Mississippi: 3 years
  • Missouri: 10 years
  • Montana: 8 years
  • Nebraska: 5 years
  • Nevada: 6 years
  • New Hampshire: 3 years
  • New Jersey: 6 years
  • New Mexico: 6 years
  • New York: 6 years
  • North Carolina: 3 years
  • North Dakota: 6 years
  • Ohio: 15 years
  • Oklahoma: 5 years
  • Oregon: 6 years
  • Pennsylvania: 4 years
  • Rhode Island: 15 years 
  • South Carolina: 3 years
  • South Dakota: 6 years
  • Tennessee: 6 years
  • Texas: 4 years
  • Utah: 6 years
  • Vermont: 6 years
  • Virginia: 5 years
  • Washington: 6 years
  • West Virginia: 10 years
  • Wisconsin: 6 years
  • Wyoming: 10 years

As long as no action is taken with the debt, the clock on the statute of limitations will continue to run. It is vital to note that taking action for the duration of the debt can restart the statute of limitations. This could give the contractor longer to seek repayment. 

What Is the Writing Requirement for Contracts?

There are requirements when it comes to drafting a contract, often referred to as statute of frauds laws. These type of laws exist to prevent contract fraud by requiring a written agreement. Written contracts are often deemed more reliable because both parties can return back to the original document if a disagreement occurs.

What Types of Contracts Are Required to Be In Writing? 

The statute of fraud laws in many states requires that certain contracts be officially written and signed to be considered valid. Some contracts that require a written agreement include:

  • Sales of land
  • Sales of goods over $500
  • Contracts that require longer than a year to complete
  • Marriage contracts
  • Surety contracts
  • Contracts that will exceed one party's lifetime

If you need help with what is written contract, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.