04/01/2018 12:54 SAST | Updated 04/01/2018 12:54 SAST

Must A Contract Be In Writing To Be Binding?

Parties can do a deal on a handshake, or even an oral agreement. But there are some issues to be aware of...

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A contract does not always have to be in writing to be binding. Roy Bregman of Bregman Moodley Attorneys clarified this for HuffPost.

A contract consists of an offer by the offeror (the seller or service provider) to the offeree (the buyer or client) to buy goods (movable or immovable) or services, for an agreed price or fee. "This becomes binding when the offeree accepts the offer –– and obviously, there must be agreement as to what is being offered," explained Bregman.

However, this acceptance does not always need to be in writing. "As a rule, parties can do a deal with a handshake, or even orally," said Bregman.

But there are exceptions to this, as there are a few contracts that need to be written to be enforceable:

  • An agreement to sell immovable property (land, house or building);
  • Suretyship agreements, credit agreements, antenuptial (marriage) contracts, leases over ten years, and contracts for executionary donations (to be made later)
  • Wills

Further, noted Bregman, some contracts may not be enforceable, whether oral or written. For example, if they are illegal, contra bonis mores [against public policy or norms], or impossible to perform.

He pointed out, however, the importance of putting a contract in writing -- even if you don't have to, in law:

  • It's easier to prove the existence of a written contract
  • Written contracts provide individuals and businesses with a legal document stating the expectations of both parties
  • If one party breaches a term of the contract, the consequences of a breach and the remedies are set out.