Contracts – When You Swim With Sharks (Part 2)
Last instalment we discussed Contracts generally, and written Contracts in particular.
This instalment introduces you to the Oral Agreement.
There is an old expression that ‘an oral agreement is only worth the paper that it is not written on.’ Put simply, this implies that an oral agreement is worth nothing. Why? Because it is not in writing.
Do not be fooled. The law treats, for most types of transactions, considers an oral agreement as legally equal to a written agreement.
Despite its technical equality, the following are some challenges associated with relying on an oral agreement –
Establishing its existence.
Ascertaining its terms.
Determining whether performance, or a breach, has occurred.
You cannot expect your opponent, the shark, to help you. They are not likely to help you address any of your above challenges.
Further, even if you are not dealing with a shark, the absence of writing can cause confusion as to what, if anything, was agreed to.
How can you avoid these problems? Use a written contract, drafted by your lawyer!
Stay tuned for our next instalment which will discuss yet another form of Contracts, those that are implied.
