When does an agreement / contract need to be in writing?
In many situations, a contract (which may be an oral agreement) will be enforceable based on the reasonable beliefs and conduct of the parties involved. However, in some situations, an agreement must be reduced to writing and signed by the party that the contract is being enforced against. These situations are as follows:
- a promise by an executor or administrator to answer out of his own estate for any debt or damage due from his testator or intestate;
- a promise by one person to answer for the debt, default, or miscarriage of another person;
- an agreement made on consideration of marriage or on consideration of nonmarital conjugal cohabitation;
- a contract for the sale of real estate;
- a lease of real estate for a term longer than one year;
- an agreement which is not to be performed within one year from the date of making the agreement;
- a promise or agreement to pay a commission for the sale or purchase of:
- an oil or gas mining lease;
- an oil or gas royalty;
- minerals; or
- a mineral interest; and
- an agreement, promise, contract, or warranty of cure relating to medical care or results thereof made by a physician or health care provider as defined in Section 74.001, Civil Practice and Remedies Code. (This provision doesn’t apply to pharmacists.)
It is always advisable to reduce your arrangements / contracts to writing when possible.
Many small businesses operate informally and without issue for years based on oral/handshake agreements. Sound legal advice is to reduce every material agreement to written contract. Sometimes, practically speaking, this doesn’t always happen. If you are someone who doesn’t make a habit of operating on contracts, then you should specifically take note of the instances described above in which an agreement is not enforceable no matter what kind of an understanding you felt you had.