What Contracts are Required to Be in Writing?
Most contracts can be either written or oral, but some agreements must be in writing in order to be binding. The following types of contracts need to be executed in writing:
- real estate sales;
- agreements to pay someone else's debts;
- contracts that take longer than one year to complete;
- real estate leases for longer than one year;
- contracts for over a certain amount of money (depending on the state);
- contracts that will last longer than the life of the party performing the contract; and
- a transfer of property at the death of the party performing the contract.
An English law from 1677, the "Statute of Frauds," provides the basis for current written contract requirements. The goal of written contract rules remains the same as ever-to avoid fraud by requiring written proof of the underlying agreement. This legal goal makes sense as a practical objective as well.
Although other types of contracts may be oral, it is advisable to "get it in writing" to insure both parties understand their obligations. If court enforcement is required, a written contract shows the parties' obligations and avoids a "he said, she said" dispute. It is easier to check with an attorney prior to signing to see whether a contract is valid than it is to enforce a poorly-drafted agreement after problems arise.