The lawyers at Katz Law Group have years of experience analyzing and enforcing your oral contracts. Perhaps the most critical element that will determine whether an agreement is a binding contract is whether or not there is consideration. Consideration means that each party must exchange something valuable. Without consideration, the exchange assimilates a gift between the parties and no contract. Depending on your source, there may be between four and six elements that make a contract legally binding. Some sources consolidate elements under the same title. The six possible elements are as follows: most oral treaties are legally binding. There are, however, some exceptions, depending on the design of the contract and the subject matter of the contract. In many cases, it is best to establish a written agreement to avoid litigation. Let`s continue with our imaginary scenario: if, after receiving his new tire, the nephew decides not to reimburse his aunt, if he receives his next paycheck, the aunt can take him to court. 1.
All agreements shall be set out in writing in a duly drafted contract. Oral agreements must be avoided at all costs. Another problem with oral agreements is that some people may be presented on the spot during their interviews and conclude agreements without having thought carefully about the details and consequences of the transaction. As a general rule, a written agreement shall give each party the opportunity to read the terms of the agreement prior to the signing and conclusion of this agreement. For this reason and for the aforementioned reasons, we always recommend a written agreement, as opposed to an oral agreement. In addition, written contracts protect all parties from possible misunderstandings that may arise in the course of the negotiation process. If a party signs a written contract without first reading it, it is still obliged to comply with the conditions as long as the agreement fulfils all the legal elements of a valid contract. (That`s why it`s helpful to have a contract-trained lawyer audited to make sure the document reflects the actual conditions the parties intended to make during the negotiations.) A famous example of the applicability of an oral contract occurred in the 1990s, when actress Kim Basinger withdrew her promise to star in Jennifer Lynch`s film Boxing Helena.
A jury awarded $8 million in damages to the producers. .