Do I need a Written Contract? This question should be examined in two ways. First, does the law require that the agreement in question be put into writing in order to be enforceable? Second, as a practical matter, should you put the agreement in writing to protect yourself down the road should the other party fail to perform?
In Mississippi, there are many types of oral agreements that the courts will enforce. The Mississippi Supreme Court has said, generally speaking, oral agreements are just as enforceable as written agreements.
Contracts That Are Only Enforceable When in Writing
There are, however, a number of agreements that the courts will not enforce unless they are in writing. Some examples are:
- Agreements for the purchase of goods at a price in excess of $500.
- Agreements for the purchase of real property.
- Agreements to be responsible for another person’s debt.
- Leases of real property for a longer term than one year.
- Any agreement that is not to be performed within a space of 15 months from the time it is entered into.
- An agreement to pay a rate of interest higher than 8% per year.
As to the second question, it is always a good idea to put your agreements in writing and have each party sign the document. There are three benefits to this.
First, having it in writing can eliminate misunderstandings between the parties as to the exact terms of the deal.
Second, a person who knows he or she has signed the document is less likely to breach the agreement or try to back out of the deal. Third, should the other party fail to perform, it is far easier to enforce a written agreement in court than an oral agreement.
The third benefit is particularly important. Under Mississippi law, the meaning and enforcement of the contract is a decision that can be made by the judge at an early stage of a lawsuit. But, the question of whether an oral agreement actually made is something a jury has to decide, meaning that you may have to incur substantial expense in taking a lawsuit all the way through trial.
If the transaction in question is small without a lot being at risk, so that it is not economically feasible to pay a lawyer to draft a contract, you can nevertheless outline the basic terms on a sheet of paper and sign it.
When the stakes are higher, so that you may be exposed to substantial risk if the other party does not perform, you should speak with an attorney about preparing a contract that will provide you with maximum protection.
Call Pepper & Odom Law Firm at 601-202-1111 today.
571 Highway 51, Suite B. Ridgeland, MS 39157
Original content by: Attorney Craig Panter of Panter Law Firm