Do I Need a Signed Contract to Bring a Breach of Contract Case?

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In both your business and personal affairs, you are no doubt asked to sign a lot of agreements, especially when dealing with large, faceless entities. It can seem like every time you log into your Itunes account or open your mailbox to find correspondence from your bank or credit card company, there is a new, densely written, small-type contract that you have to assent to in order to continue receiving services. But when business is conducted more personally – such as when you work on a potential business venture with a colleague or agree to provide a service as an independent contractor – oftentimes, no written contract is created and instead agreements are sealed with a handshake or just an oral assent to work together. But when one party does not hold up their end of the bargain or decides he or she does not want to move forward, does that handshake mean an enforceable contract has been made? More to the point, can one party bring a breach of contract case in court when there is no written, signed contract?

Some, But Not All, Contracts Require a Signed, Written Contract

The short answer is that, no, most contracts do not have to be in writing to be considered valid and enforceable contracts. That said, a written contract can be tremendously helpful (or damaging, depending on whether you are trying to uphold the obligations of the contract or avoid them) in a breach of contract action. So long as two people both agree to the terms of the contract orally or through other non-written manifestation, and there is valid “consideration” (mutual obligations on both sides, as opposed to a merely gratuitous promise by one party to the other, e.g. “I will give you my car next year”), most oral contracts are enforceable.

Except when they are not. Every state has some version of the “Statute of Frauds” which is a list of contracts that must be in a writing signed by the party against whom enforcement of the contract is sought (in other words, signed by the party who is trying to get out of the contract) in order to be enforceable. In California, the Statute of Frauds includes contracts for:

  • Services that cannot be performed within one year of the making of the contract
  • A promise to guarantee the debt of another
  • A land sale
  • A lease lasting longer than a year
  • An agent to act one’s behalf in purchasing real estate or leasing for longer than a year
  • Certain agreements to pay existing mortgages on property
  • Certain loan agreements exceeding $100k

Why a Written Agreement is Important for Those Bringing Breach of Contract Actions

While a written, signed contract is not required to bring a breach of contract action against another, it can be tremendously helpful in actually being successful in winning the action. When there is a written contract, a court can clearly see what it was that was agreed to, and the parties can simply provide evidence regarding whether the terms of the contract were met or not. And in many cases, going to court is not necessary as the result that would happen in court is clear based on the terms of the contract and thus the parties can settle outside of court.

Without a written contract, however, then it can come down to your word versus the other party’s word over what the terms of the oral agreement were, or indeed whether there was ever an agreement at all. This can be difficult to prove in court, although the court can look at all available, admissible evidence in making this determination. Ultimately, the lack of a written contract brings uncertainty in the enforceability of the contract, which is exactly what some parties want and is the reason why they often do not want to create written agreements.

If you are considering entering into an agreement where there will be no written contract, it is often best to consult a business litigation attorney to determine whether doing so will serve your interests in the long run.

Talk to a Los Angeles Real Estate Attorney

If you have any questions on lease formation or interpretation, an experienced Los Angeles real estate attorney can help. Attorney Laine T. Wagenseller of Wagenseller Law Firm has published numerous articles on real estate law and works with individuals and businesses across Southern California in resolving real estate matters. Contact Wagenseller Law Firm today to schedule a consultation in order to discuss your real estate law questions.

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