Adi Said

Are you an entrepreneur who handles so many transactions daily? Are you aware some of those transactions must be in writing to avoid the risk of loss? Let’s find out about them. A valid contract has five essential elements: i. Valid agreement ii. Consideration iii. Occasionally, in writing iv. Capacity v. Legality In this post, we will learn about the third element of a valid contract. As per the Statute of Frauds, some contracts must be in writing to become enforceable. The general rule is that all contracts are enforceable, whether oral or written. But the Statute of Frauds requires some contracts to be in writing to be enforceable. A written contract includes all kinds of contracts that are in writing, such as emails, written documents, etc. TYPES OF WRITTEN CONTRACTS i. Marriage All contracts that are in consideration of marriage need to be in writing. It does not mean a contract to marry someone has to be in writing. It means promises in consideration of a marriage, such as a prenuptial agreement. ii. Year All contracts that cannot be performed within one year, such as a five-year lease of an office or any other type of contract with a duration of more than one year, must be in writing. iii. Land All contracts that include the transfer of an interest in land need to be in writing: for example, the sale, purchase, and lease of land. iv. Executor It is hard to come across these kinds of contracts. When a person dies, the executor of an estate makes a contract to pay off the deceased’s debt out of his personal fund. These contracts need to be in writing. v. Goods A contract for goods of sale of more than $500 must be in writing. The definition of “goods” here includes movable and tangible goods, such as coffee, bottles, etc. It does not mean immovable and intangible goods, such as buildings, intellectual properties, etc. vi. Suretyship It is simply a fancy legal term that means providing a guarantee to pay someone else’s debt. For example, a son applies for a loan to purchase a car. The loan provider asks the son to provide surety if he does not repay the loan in the future. The father decides to act as a surety for his son’s loan agreement, which is usual. This kind of contract needs to be in writing. It is easy to remember these contracts with the acronym “MY LEGS.” My legs stand for: marriage, year, land, executor, goods, and suretyship. CONCLUSION Both types of contracts are valid and enforceable, whether they are oral or written. But the Statute of Frauds makes it necessary for some contracts to be in writing to be enforceable. So the bottom line is that all contracts mentioned above must be in writing to be enforceable. Next time you enter into any of these contracts for your business, make sure it is in writing.