GET IT IN WRITING ... SIMPLE, RIGHT?

Have you ever purchased something without getting a receipt? Have you ever promised someone that you're "good for it", and shook the other's hand?  Have you ever agreed to help someone do something, but not put the arrangement down in writing?  My bet is that most of us have.  The reason we have is that, in most instances, the arrangement is finalized or completed without problem.  There are times, however, when such an arrangement fails or is completed with resulting problems.  This can cause lots of headaches, heartaches, and financial dilemmas.  In fact, sometimes, the issue is simply that the parties making the deal were not detail-oriented, and had not thought of the issue until it became one.

Solution - GET IT IN WRITING!  In California, taking after the Common Law principle known as the "Statute of Frauds", certain agreements must be in writing.  Civil Code section 1624 identifies many such agreements:

1.  An agreement that by its terms cannot be completed in 1 year from the making of the contract (An employment contract where the employee signs on for a 1+ year term, for instance);

2.  A special promise to answer for the debt, default, or miscarriage of another (ie, a personal guaranty);

3.  An agreement for the leasing for a period more than 1 year (similar to #1 - a residential lease for 1 year or more);

4.  An agreement retaining someone to sell/buy real estate on promisor's behalf (a listing agreement) or to procure a lease of more than 1 year;

5.  An agreement that, by its terms, is not to be performed during the promisor's lifetime. (a will - which is an agreement by the executor to transfer property pursuant to the wishes of the promisor/dead person);

6.  An agreement  by the purchaser of real property to pay an indebtedness secured by a mortage or deed of trust ... (the mortgage);

7.  A contract/agreement to lend money in excess of $100,000 for a purpose not principally deemed for personal, household, or family purposes by someone in the business of lending. (A business loan).

There are a few other well recognized agreements that must be in writing as well: for instance, an agreement to purchase goods (tangible property) for $500.00+.  Most real estate transactions require that disclosures be in writing.

But, there are also many instances where there is no formal written agreement.  A simple example is employment.  Most of us who have jobs, are employed "at-will".  Usually, such "at-will" employment (meaning either side can terminate the relationship without reason at any time) is made without a formal written agreement in place.  There may be an employment handbook that provides the employee with the policies of the particular employer; but, there is nothing in writing that is signed by the employee that guarantees that employee a job with the employer.

Partnerships result from at least two parties deciding to go into some form of business together.  Partnership agreements need not be in writing ... but they should be!

Corporations are bound by an agreement known as the "Bylaws" of the corporation; the "Bylaws" must be in writing; however, many corporations, especially small corporations, fail to maintain buy-sell agreements (shareholder agreements), and otherwise fail to keep explicit minutes (records) of annual board meetings.

My suggestion is that, to the extent you have promised to do something for another (or with another), you set forth the arrangement in writing, dated and signed by the parties to the arrangement.  The more specific and detailed, the better.  Better yet, retain legal counsel early in the process to guide you.

What are your thoughts?