In the world of business, it is not uncommon for two parties to enter into an agreement without actually signing a formal contract. However, in the eyes of the law, this sort of agreement is considered to be void. The legal principle behind this is that any agreement that is not properly documented and signed by both parties cannot be enforced.
This may come as a surprise to some, especially those who may have verbal agreements with business partners or clients. But the fact remains that without a written and signed contract, any promises made between the parties involved are not considered legally binding.
It is important to note that verbal agreements are not completely worthless. They can serve as evidence of the parties’ intentions and can help establish an understanding between them. However, in the event of a dispute, the lack of a written contract can make it difficult to prove the terms of the agreement.
To avoid this problem, it is always best to have a formal contract in place. This document should outline the specifics of the agreement, including the responsibilities of each party, the payment terms, the timeline for completion, and any other relevant details. Once both parties have signed the contract, it becomes a legally binding document and can be used to enforce the terms of the agreement.
It is also a good idea to have an attorney review the contract before it is signed to ensure that it is in compliance with any relevant laws and that all necessary provisions are included.
In summary, while verbal agreements may be common in business, they are not legally enforceable. It is crucial for parties to have a formal contract in place to ensure that their agreement is binding and enforceable. Failure to do so can result in costly disputes and legal battles.