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business without a written contract is legal tomfoolery

Business Without a Written Contract is Legal Tomfoolery

A contract forms a legal relationship that defines the rights of parties to a business transaction. Another way to look at a contract is it is a legal arrangement that protects your rights. Sometimes businesses are tempted to bypass a contract for various reasons. A common reason is to avoid potentially missing out on a transaction for fear the other side will walk if a contract is presented. Another concern is the legal costs to execute a contract. For those that have gone through litigation involving a business transaction gone bad, it might be worth passing on a transaction if the other side bristles at signing a contract.

One benefit to a contract is that it gives you a legal remedy if the other side fails to perform their promises. Without a contract, your legal remedies if the other side fails to are murky. The legal expense to enforce a business deal gone bad that did not have a contract can be expensive, if not cost prohibitive. Instead of clear terms that the parties agreed to, a court is forced to look at evidence of what the parties intended, reliance, and enrichment. These issues present uncertainty and add.

Business contracts do not need to be unnecessarily expensive, lengthy, or filled with unintelligible legal jargon. The best contracts are in writing, simple, concise, drafted with language that everyone easily understands, and signed (ideally through an electronic signing service). A contract that meets the foregoing criteria adds confidence that the transaction will go smoothly and the parties receiving the benefit they bargained for. Not using a contract will eventually result in a major legal dispute for a business.


Johnstun Law is happy to help you with forming a written contract . To learn how we can help your business succeed, call 801-980-5300, or fill out our contact form.

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