If I had to pick the most common misperception among non-lawyers, I’d nominate the perception that agreements must be in writing–or witnessed, or notarized, or signed with the blood of an newt after dusk, or contain some other formality. It’s simply not true: A verbal contract is normally enforceable. You might have evidence problems (“What? No, I didn’t say I’d mow your lawn for $2″), but if you can convince the court that you had an agreement, the court should enforce it.
But there is a thing called the “Statute of Frauds.” This statute says certain agreements must be in writing in order to be enforceable. Contracts with respect to real estate, for instance, and contracts that can’t be performed within a year. Although there are ways around the Statute of Frauds, if your contract is required to be in writing, you best use a pen and paper.
This is especially the case because the Statute of Frauds often rears its head when people don’t expect it. A Delaware court, for instance, recently held that the Statute of Frauds applies to one of the most-common contracts on the market today: Operating Agreements for limited liability companies. Delaware is often the “leading” state when it comes to matters corporate, so other state courts will no doubt give the ruling considerable weight in their decisions.
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