When dealing with a business, especially for a relatively straightforward job, it can seem like overkill to write everything down. That may be true when everything goes right. But when something goes wrong or there is a disagreement over the details of a job, having a clear record of your communications can be the difference between winning and losing your claim.
Are Oral Contracts Enforceable?
In general, contracts are enforceable, whether they are written or oral. However, verbal agreements carry two significant flaws. 1) They only exist in your memory. 2) The details may have been unclear, to begin with. Consider the following situation:
You have an initial meeting with a contractor to build a deck onto your house. The contractor says they’ll be back next week to drop off materials and start building. A week goes by, and you haven’t heard from the contractor. Now you are left to wonder whether the promise to come back next week meant one week from the date of your conversation or just some time in the following week. And was that a promise or just a guess as to when the contractor will be available? Without a written contract, you may have a very different idea about your communication than the contractor does.
Not only that but if you contact the contractor and ask why they haven’t delivered the materials, they may not even recall the conversation the same way you do. As long as you can agree on the actual terms of the agreement, it should be enforceable, but you have no way of proving what the initial agreement was.
When You Need a Written Contract
While common law dictates that oral agreements are generally enforceable, some contracts must be in writing. That’s because these specific agreements are voidable by either party at any time. In other words, the deal is worthless if one party wants out.
The following voidable agreements that must be in writing to be enforceable:
- Any sale or transfer of real estate
- An agreement to secure someone else’s debt
- A real estate lease for longer than one year
- A contract that will take more than one year to fulfill
- Any contract over a state-mandated minimum dollar amount (varies by state)
- A contract that will last longer than the lifetime of one of the parties
- A contract to transfer property that takes effect upon the death of the party performing the contract
If these contracts are not in writing, either party can void the agreement at any time for any reason. In other words, they are as good as no contract at all.
Communication Besides Contracts That Should Be Documented
Besides the initial agreement, other communications with your contractor should also be documented. This is especially true in the case of a disagreement. Once you have lodged a complaint, any communication that involves resolving the dispute should be documented. That may mean communicating in writing via email, recording phone conversations, or keeping receipts and other paperwork.
If you have a record of your back and forth with the offending company, you can demonstrate that you have tried and failed to achieve a resolution. This may be useful for coming to a more permanent solution. You might go to court, end up in mediation, or contact TrustDALE. In any of these cases, having a record of your attempts at a resolution can bolster your case.
If you can show a goodwill attempt to make it right, you may be able to hold the offending business accountable. You have proof of any promises made along the way. There will be no question as to how the company has promised and failed to resolve your issue. Often, when faced with documentation of their promises and failures, a business will capitulate and offer a solution. They have nowhere to hide and know that they wouldn’t do well in court. Their best option is to provide you with a fair settlement and cut their losses.
So whenever possible, document all of your communication with a business. You know when it will come in handy.