Even though some oral agreements are just as enforceable as written ones, there are more benefits to having a written agreement. The days of just handshakes are long gone. Today, written contracts play a crucial role in fostering the transfer of property ownership and business transactions.
It may be exhilarating to join a new business venture, but your interests should always come first. Keep in mind that transactions fall through and circumstances change, so establishing a written agreement is one of the greatest ways to strengthen things. Therefore, having a written contract has many advantages for organizations.
To serve as proof
Putting anything in writing makes it easier to have proof in case of litigation. For instance, if you have entered into a contract with someone or an organization, and they have breached, a written contract can act as proof in court. It will not only serve as evidence but also indicate the terms of the agreement. On the other hand, oral agreements are tailored toward proven testimony of the parties involved along with any traceable activities, such as deliveries and emails.
Besides, a written contract is concise and straightforward. Thus, it can clearly show if a party has breached a contract or not.
To provide an enforceability advantage
Written contracts are not just recommended because of the proof they offer but also due to enforceability advantage. Some contracts must be in writing to be enforceable. For instance, contracts for selling or financing real property must be in writing to be enforceable under the State of Fraud provision of California Civil Code section 1624.
To help in resolving disputes
A well-written contract will incorporate a remedy clause. It will outline how to resolve a dispute between the parties involved. Some may consider mediation or arbitration to avoid lawsuits. In contrast, others will allow parties to resolve the issue among themselves and obtain a resolution. Some contracts also favor resolving disputes in court. Generally, everything is subject to the parties’ understanding of one another.
To offer confidentiality provisions
A written contract allows one to agree to confidentiality and non-disclosure provisions protecting classified information. Per the agreement, the parties involved must keep the information provided and transactions conducted between them confidential. What’s more, a breach of the confidentiality agreement would result in liability for the offending party. Putting an agreement in writing is the best way to make the other party honor the contract terms.