Thursday, May 21, 2015

Do I need that in writing?

A common misconception is that, in order to be an effective agreement, all contracts must be in writing and signed by both parties.  This is not true.  So long as the parties to the agreement are able or "competent" to enter into an agreement and so long as some type of value or "consideration" is exchanged, then many types of agreements may be effective upon a verbal exchange or with an unsigned writing.

photo credit: NobMouse
There are, however, some types of agreements that are ineffective unless they are in a writing signed by the party against whom enforcement is sought.  Such types of agreements are outlined in what is known as a "statute of frauds."  The Arkansas statute of frauds--located at Ark. Code Ann. § 4-59-101--includes agreements involving guaranteeing the debt of another, the sale of an interest in land, a lease in excess of one year, a personal services contract that is not to be performed within one year of the contract, among several others.

In light of the potential pitfalls involved in executing a contract, it is typically advisable to consult an attorney before entering into any type of legal agreement.  Everyone hopes that their agreements will work out, but a knowledgeable attorney can help you ensure that your contracts are enforceable in the event of a breach.