By Aaron Swimmer, Esq.

A verbal contract isn’t worth the paper it’s printed on.”
Samuel Goldwyn, (1882-1974) Founder of Metro-Goldwyn-Mayer (MGM)

Oral contracts can be as binding as written contracts, but without a written record it can be difficult to prove what you have agreed to. If your deal goes south, you may be endlessly chasing the truth. It is tempting to move forward on a handshake, but it’s worthwhile to take the time to draft and sign a written contract. Written contracts are the ounce of prevention that helps reduce costly disputes by spelling out your entire deal.
A written contract states all the terms and conditions of a business relationship; this helps the parties involved to avoid any misunderstanding that may arise down the road. If you are collaborating with a friend on your new business, then it is all the more important to create a written contract. This will help you avoid misunderstandings and will save you from the rifts that might end your friendship. If you have an oral agreement, you might forget some points that you agreed to with the passage of time. With a written agreement, all the terms and conditions are crystal clear at any point in time. A written contract can always be amended with the written consent of both the parties. You should not take it for granted that the threads of your relationship (business, personal or otherwise) are strong enough to face any crisis. The fact is that disagreements can and do arise, especially between friends and family members, and especially when a close personal relationship is intertwined with a business one.

When you get into a verbal contract, you may not discuss things that seem to be obvious. It is these previously unmentioned issues that usually create trouble in the future when you want to enforce any agreements that have been made. Conversely, when you get into a written contract, you and all the parties involved are cautious enough to include all the details, making disagreements later on far less likely.

As a business owner, it is very important to get into the habit of always using written contracts. If you use written contracts, it is far less likely that you will end up in court because your contracted partners will be much more inclined to work with you to find a solution and work things out.

Written contracts are for your protection. Use them diligently and your associates, customers and clients will see that you are serious about doing business the right way. Swimmer Law Associates, P.A. is experienced in the field of contract law; feel free to contact our office to discuss your special needs.