There are some definite advantages to putting Agreements in writing.
It is recommended that Agreements involving large sums of money or assets be put in writing and signed by the parties.
Family agreements should also be put in writing to minimise misunderstandings or disputes which may potentially arise later between family members. We all know what family members can be like!
Written Agreement Provide Certainty
The key advantage of putting a written Agreement in place is that it provides certainty. Verbal contracts often leave some matters unsaid or implied. Such implied terms are often difficult to ascertain and to determine whether they are intended to be a part of the agreement. There may also be some uncertainty about whether certain oral statements or representations made in the course of the Agreement constitute a part of the Agreement itself.
Written contracts go a step further than verbal Agreements and provide greater certainty about the matters being agreed to. Written Agreements help ensure the intention of the parties is the same: that the parties are operating from the same foundational understanding.
This is not to say that written contracts cannot be uncertain. However, they are less likely to be so than verbal contracts.
Written Agreements Promote Deeper Consideration of the Issues
The process of putting an Agreement in written form may also trigger the parties to consider more fully pertinent issues surrounding the Agreement and prompt the parties to set out the terms of the Agreement in greater detail and clarity as opposed to a “handshake” type deal.
Be clear – use Plain English
To provide as much certainty as possible, ensure that your contract is clear and the intention of the parties is easily and readily understood.
There is no for your Agreement to use hard to understand and archaic type legal jargon unless absolutely necessary. Having your contract in clear and plain English means that it is more easily understood by all, and any ambiguity is minimised.
A contract will not be enforceable if it is “so obscure and so incapable of any definite or precise meaning that the court is unable to attribute to the parties any particular contractual intention”.
The Court puts it this way: “In order to constitute a valid contract, the parties must express themselves that their meaning can be determined with a reasonable degree of certainty. It is plain that unless this can be done it would be impossible to hold that the contracting parties had the same intentions.” G Scammell and Nephew Ltd v HC and JG Ouston.
Written terms are less likely to be argued
The terms of a written contract are easier to establish and prove, than those of a verbal agreement.
This is relevant if parties later disagree about what the terms of their verbal agreement actually were. If the terms were not recorded in writting, it will be difficult to establish what they were, especially after a period of time has elapsed.
The parties are less likely to remember the terms accurately at a later date or may find their recollections about their Agreement differ.
Where mediation or court proceedings are instigated, constructing the terms of a verbal Agreement can prove difficult. This can result in drawn out proceedings just to establish what was actually agreed to!
Reducing the terms of a verbal agreement to writing is a relatively simple and straight forward process.
It is a proactive step that can cost little or nothing.
Anyone who is considering entering into an Agreement should make sure that the intentions of all parties are clear and their agreement put in writing and signed.