PREVENTION - THE WRITTEN CONTRACT

How often do we make contracts in life? Quite often, actually. In fact, most all of us make daily contracts with so many different people, it is hardly difficult to think of your last one.

Let's take an average day. You get up in the morning, head out the door, and go get that first cup of Joe. $2-$3 at the local coffee shop. In reality, that's a contract, right? The coffee shop offers a cup of good coffee for $2; you agree to pay that price, hand over your $2, and wait while the coffee clerk makes your steaming cup o'Joe.  When you receive your cup, the deal is fully performed. You go about your day. If you take the bus/train/toll road, you pay $$ to use that type of transportation and, in return, the city, county, state, etc. allows you to use the bus, train, toll road. You turn on the TV in the evening to watch the latest Fake Housewives show, and guess what, you get cable TV because you and the cable company previously agreed that, in exchange for $$, you get the shows.  Thus, we make contracts all day long, usually without thinking seriously about the terms of the contract.

Sometimes, there is "fine print" or other written verbage that defines the terms.  Usually, however, we simply agree to pay a price in consideration of receiving the goods or services sold, without thinking too heavily about conditions on the agreement.

Sometimes, however, an agreement must be in writing, with specific terms outlined in writing, and signed by the parties to the agreement.  Public policy outlines many of these types of writings: Promissory notes, real property transactions, and purchases of goods worth more than $500 are the most common.  The rationale is that a written agreement provides proof, more than just testimony/memory, but actual written terms for the parties to follow.  Should something not go according to plan, you can take the writing into court and the court can interpret the meaning of the contract.  Think of a dispute as a tornado.  Think of insurance as the written contract that existed prior to the dispute.  Your life will be turned upside down by the tornado's impact; but, you will be able to get through it with the insurance.  Same with a dispute between parties to an agreement.  With the written contract, you will have a much better chance of righting the ship than if you risked a dispute without such written agreement.

If you do business, you need to review your written contracts at least annually to insure that they comply with laws, are simple to understand, and specifically, protect your interests should a dispute over that agreement arise.

Have a Great Day!