Do Contracts Have to Be In Writing?

avoidance order

Businesses enter into different contracts to regulate their daily transactions. Particularly, they use employment contracts, commercial contracts and even contracts relating to independent contractors. What you need to know about enforceable contracts is that they do not always have to be in writing. Contracts can be valid if they’re written, verbal or even made with a handshake. They are valid as long as the main elements of a contract exist which include agreement, consideration, capacity, intention and certainty.

In this article, we’ll talk about verbal contracts and when they can and can’t be enforced.

Need specialised advice regarding your company?

Contact a Lawpath consultant on 1800 529 728 to learn more about company registration, customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

Types of Enforceable Contracts

Simple Contracts: Oral

Many informal contracts are made verbally without anything in writing. Your business is likely to be dealing with many clients everyday, so you must ensure you remember your oral agreements. Oral contracts are more difficult to enforce in Court because there is no written record of the agreement. In situations of conflict, it may be beneficial for you to have something in writing of the agreement rather than relying on your memory. However, the court can still enforce such a contract so do not make any promises that you cannot keep.

Formal Contracts: In Writing

In some situations, the law demands a written contract. An example of this is in the sale of land and real estate cases. Written contracts are definitely the safest type of contract to have because they clearly outline your agreement with the other party. They are the most enforceable contracts. It acts as a documented proof which you can refer to in case of any conflicts that may arise. If you hire employees, having a written employment contract will allow your employees to know their rights and your expectations.

Standard Form Contracts

These contracts tend to be preprepared and include a lot of fine print that you might not understand. Before you enter such contracts, you must ensure that you see a lawyer to know exactly what you are agreeing to. These types of contracts aim to benefit the person who has created them and not so much to the person signing them.

Contracts That Don’t Work

Unenforceable Contracts

There are situations in which a contract may be valid but cannot be enforced. This happens in cases where the statute demands some form of writing but this is absent in the contract.

Voidable but Enforceable Contracts

In these contracts, the validity of the consent given by one party to the other is questioned. If any terms of the contract have been misrepresented to you, or you were under someone’s influence when you signed it, the contract becomes void. However, if you signed something without reading and understanding it properly, you will still be bound by it.

Don’t Forget…

Whenever you are intending on entering a contract with someone, be sure of exactly what you want from it. Make sure you and the other party is agreeing on the same terms. It is important for businesses to understand the contracts that they are issuing and signing to avoid conflicts. Any legal disputes can impact the company’s reputation and do monetary damage.

Find the perfect lawyer to help your business today!

Get a fixed-fee quote from Australia's largest lawyer marketplace.


Most Popular Articles
You may also like
Recent Articles

Get the latest news

By clicking on 'Sign up to our newsletter' you are agreeing to the Lawpath Terms & Conditions


Register for our free live webinar today!

Essential Strategic Planning for the New Financial Year

12:00pm AEDT
Thursday 11th July 2024

By clicking on 'Register for webinar' you are agreeing to the Lawpath Terms & Conditions

You may also like

Want to become a virtual assistant but now sure what steps you need to take? This article dives into the requirements, skills and equipment you need to become a virtual assistant.
The 2024 Federal Budget has unveiled a comprehensive package of measures designed to support small to medium enterprises (SMEs) in Australia, while also laying the groundwork for a "Future Made in Australia."
Default interest clauses can help protect lenders' interests, but sometimes they will not be enforceable. Find out more here.

Thank you!

Your registration is confirmed. Keep an eye on your inbox for an email with details on how to watch the webinar.