As a general rule, oral contacts in New Jersey are enforceable – not that they are recommended. Contracts may be oral, for instance; someone offers another person a car, then the other person verbally accepts the offer and pays for the car. First there always has to be an offer of a contract, second, there has to be an acceptance of the contract. What happens when, in addition to making an oral offer, the seller provides the buyer with a document with all of the terms of the contract written out? This makes the contract a written contract, but there are two types of written contracts. There are signed written contracts and unsigned written contracts. Whereas oral contracts are controlled by the promises spoken by the parties, written contracts are controlled by the terms in the contract. There are also contracts that may be partially oral and partially in unsigned writings. These types of contracts include: a) if both parties have past dealings with each other and there has been evidence that these written unsigned contracts have controlled the conduct of the parties; b) if both parties are shippers and receivers of commercial goods, then U.C.C. terms will control; or c) if there is evidence of partial performance. Unless your company deals in shipping or receiving of commercial goods, it is always best to obtain written signed contracts with all parties, before you provide services or sell a product, especially for contracts over $3,000.00.
Some written contracts must be signed, for example, the sale of real estate, contracts for broker fees, prenuptial agreements and leases that last longer than three years. As a rule of thumb, if you are dealing with a party, either a business or a person, who has greater resources than you, it is always best to have a written contract signed by both parties. Whether you are a general contractor renovating a mid-size warehouse or if you are a painter, painting the inside of a three thousand square foot house, it is always best to have a two-party signed contract with all of the terms laid out. A written contract delivered to the other party, which is unsigned does not take this contract out of the Statute of Frauds ( New Jersey State rules governing when there has to be a written contract, and what constitutes a written contract, See * below). If there is a problem between the parties and you have to either threaten to go to court or actually go to court, you want a two party signed contract. You do not want to have the extra legal burden of proving the terms of the contract or proving that there was an actual contract in the first place. These extra burdens would make litigation more expensive and less likely to be successful. As it stands even with a signed written contract, a general contractor already has the burden to prove to the court that he performed his or her work in a satisfactory manner, without having to prove the existence of a contract.
A written contract is also beneficial for the selling of goods between parties. I will again use the example of buying and selling of a car. Though there is no legal requirement for a written contract for the sale of the car, if you add the words “as is,” to a contract and the other person signs it, they will most likely not be successful against you in a court of law, in case there is a defect in the car. On the other hand, if you are a buyer, you might want to put in the contract a warranty of a ‘thousand miles,’ or “that the engine is only a year old” or “that the seller will take it back for any reason for the next two months.” A signed written contract can control both parties’ behavior during and after the contract is signed.
In case you do not have a signed written contract, some possible alternatives that are not as good as a signed contract, but which may help you a court of law are: a) an exchange of emails with the terms of the contract; b) an oral contract, then the other party sends you either a signed letter, text or email regarding the contract; and c) total performance by your side and a written unsigned contract. Reach out to an attorney regarding any legal or contract issues that you may have.
• Under 2013 New Jersey Revised Statutes, Title 25 – Frauds and Conveyances – The sections under this chapter discuss in detail the different types of agreements that must be in writing and the requirements of each particular writing.
|Raymond is experienced in a host of different areas, including Immigration, Criminal, Divorce & Family Law, Wills & Estate, Incorporating your business as well as advising small businesses with their tax and investment choices.|