Every great Western movie has the moment when our grizzled hero explains that he will come through on his promise and offers his handshake to seal the deal. He explains that his word is his bond. We feel good about our hero knowing that his handshake is his word and his word cannot be broken.
If only life would imitate art in this way. Unfortunately, we have all had the unpleasant experience of learning that not everyone feels the same way about their word or their handshake. As a matter of law, it should be enough in some situations, but in other situations and as a practical matter it is rarely enough. Someone’s word, or verbal promise is extremely hard to prove in a court of law and it comes down to a case of “he said, she said.”
Moreover there are several distinct types of contract which must be put in writing. Most jurisdictions have enacted a law called the statute of frauds which requires a writing exist in order to enforce certain types of transactions. Basically, certain types of transactions are too important to allow a “he said, she said” argument to determine the outcome. For instance, if you want to sell real estate, the statute of frauds requires that a contract be in writing, signed by a capable party, and adequately outlines the terms agreed upon. The same applies to the sale of goods over $500, as well as any contract that is going to necessarily take over a year to perform.
In sum, while you may believe your word and handshake are unbreakable, and it may well be, the law does not necessarily agree and you might need a written contract for it to be enforceable. If you have contract questions or need to document a transaction you are considering, reach out to us.