None of us lives our life in anticipation of litigation. And most of us inherently trust other people. So we make agreements with people all the time that are sealed with no more than a handshake. Is that a mistake? It can be.
Recently, I got a phone call from my mother. She and my dad were trying to sell one of their vehicles privately. They live in a relatively small town and were approached by one of the car dealers in town who volunteered to let them park their truck on the lot with the “For Sale” sign. The dealership would take a portion of the sale, but a small one. Because I am an Arizona contract lawyer, my mother called me to ask whether she needed to get this agreement in writing.
For a contract to be valid and enforceable, three elements must be present – offer, acceptance of the offer, and consideration. An offer is just that – “Will you buy my truck?” Acceptance is just as simple – “I will buy your truck.” Consideration is the process of passing something of value to another party, who also gives up something (e.g., $2000 for the truck).
Some contracts are a little more complicated. For instance, the contract may also have conditions that must be met before performance is required. For example, I will pay you $500 if you paint my living room, once you find a color that is acceptable to me. Finding the color is the condition. Until that happens, you have no obligation to paint and I have no obligation to pay.
Also, Arizona has a rule known as the Statute of Frauds which requires that certain agreements have to be in writing. What are they? They include a marriage contract, a sale of goods exceeding $500, an agreement to answer for the debts of another, the sale of real property. These contracts are invalid if not written.
Many contracts, like my mother’s contract, do not have to be in writing. But they often should be. Why? Because the fact that the agreement is oral rather than written makes the job of your Arizona contract attorney much more difficult. Without a writing, the fight at trial would be what he said versus what she said. Did they really agree to anything or just consider it? What were the terms of the agreement? Were there any conditions to the agreement? Without a written agreement, the trial becomes a coin toss.
So my advice to my mother? Get it in writing. Did she do it? Of course not. You think she’s going to listen to me?