What if there was no written Contract?

This is an issue that comes up quite often in my Business Litigation Practice. When two businesses, especially small businesses, first get together they are excited to have the service/ a new client and other than maybe a written a proposal have nothing in writing setting out the terms of the agreement.

If everything does not go exactly according to everyone’s plans, this can lead to costly and frustrating litigation. While oral contracts can be enforceable, (mainly if they do not violate the statute of frauds which among other things requires written contracts for anything over 1 year in length or any contract concerning real property) there is the obvious problem of who said what at what times.

Understanding that having someone sign your proposal, and actually having a written contract are two very different things. Most proposals are basically a sales pitch and do not include all of the limiting language that is required, nor do they usually delineate the responsibilities of the other side.

You can see a more detailed discussion of what should be included in a contract in the “Anatomy of a Contract” series of articles, but remember that for the health of your business, your financial health, and your mental health, get everything in writing and make sure everyone knows in advance what their responsibilities are and what happens if there is a breach.

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