Whenever you make an agreement with someone, or decide to enter into a contract with another party, it is important that whatever agreement you and the other party come to is put into writing. Having all the terms and conditions of an agreement in writing is advantageous for a number of reasons.

Having an agreement in writing, and signed by each party, is particularly important when it comes to agreements that involve large amounts of money and/or assets.

Another area where agreements would certainly benefit from being in writing is family arrangements. This will keep misunderstandings and conflicts to a minimum wherever possible.

Certainty

One of the main advantages of always having your agreements in writing is that there will be little doubt regarding the terms to which both parties have agreed. Verbal agreements are vague and often glaze over finer details. It is often difficult to work out what terms are intended to be implied terms and what terms are not intended to be part of the agreement at all. Oral statements can often be misleading in terms of whether they form part of the agreement.

With a written contract, there is far more certainty about the terms and conditions of the agreement. A written agreement establishes each party’s respective intentions in contracting with one another. It clarifies that each party is on the same page, so to speak. Having said that, written agreements can also be unclear and ambiguous, but are usually less so than their verbal counterparts.

Greater consideration of the issues

By putting the terms of any agreement into writing, it requires both parties to consider the issues in more depth. This will mean that the final written agreement may contemplate more important issues than a more informal and verbal agreement might be able to.

Why using plain English works best

So that the written agreement is easy to understand and clearly communicates the intentions, rights and responsibilities of both parties, it should be drafted in as close to plain English as possible without jeopardising its legal effectiveness. Ideally, both parties should have no uncertainty as to the meaning of any terms, words, clauses, conditions or provisions within the written agreement.

It is impractical for your written Agreement to be drafted using legalese and archaic Latin terms that neither party understands. Plain English means there is less likelihood of confusion, which makes the Agreement more enforceable in court.

If a contract 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”, it will not be enforceable.

Written terms are more difficult to dispute

A verbal agreement will be much more difficult to prove in court than terms that are formalised in a legally binding written agreement.

This is important when parties to an agreement disagree about what their agreement actually was. When no terms are put into writing, it is more difficult to know the exact substance of the terms, particularly when it has been a long time since the parties first made the agreement.

It is not uncommon for parties to have very different recollections of the events leading up to the agreement, as well as the agreement itself.

Unfortunately, when parties enter into litigation over the terms of a verbal agreement, it can cost both parties a considerable expense just to establish what the agreement actually was!

Conclusion

Having your contracts and agreement formalised in writing eliminates any uncertainty surrounding the terms of what was agreed between the parties. It allows both parties to use the written agreement or contract as a reliable reference point, which can be used to hold the other party accountable.

For assistance with drafting or reviewing contracts or agreements, contact LegalVision on 1300 544 755 and one of our contract lawyers will be happy to help.

Lachlan McKnight

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