Although verbal contracts can be legally enforceable they can conversely be incredibly hard to evidence, so it is always a good idea for parties to a verbal agreement to solidify their agreement in writing. A comprehensive set of clear, practical and properly tailored terms can save time, costs and business relations in the long run.
On personal reflection, many years ago (although I am not going to admit how many), before my days in legal, I attended an audition in London for a spot as a season singer. The venue was based overseas and I was to stay with several dancers and DJ’s for the summer holiday season. We were told we would be sharing a large fully furnished, six-bedroom villa with (most importantly) a large and beautiful private garden complete with a swimming pool for us all to use throughout our stay. The scenario seemed perfect…
Well, let’s just say the reality was at odds with the description! On arrival we were faced with a dilapidated villa with broken windows, walls decorated with black mould and, wait for it…. the pièce de resistance – the ‘beautiful large garden’ was an overgrown mess as far as the eye could see (which was not far) and the ‘swimming pool’ had morphed into a very large unintended pond sporting green sides, floating plants, and wildlife (not us!).
It dawned on me that we had been so excited at succeeding in our auditions and the prospect of working abroad doing what we loved that we had paid our air fares, packed and travelled for hours based on the verbal assurances made: at no point did we ask to see pictures or evidence of the state of the facilities and crucially, neither did we ask to see any of those assurances in writing before we agreed to go. The lesson I learned from that point onwards was to get it in writing.
Benefits of getting it in writing
There are legal and practical benefits to putting agreements in writing, for instance: to ensure the parties understanding; to properly reflect what has been verbally agreed and limit ambiguity; and to prove at a later date what was agreed. Very often what one party takes away from a conversation does not mirror the others understanding or interpretation of what they believe was agreed. It also gives both parties the opportunity to ‘cover their backs’ knowing that there is a record of what has been agreed to which they can refer and that serves as evidence in the event of a dispute arising and a court being asked to consider the enforceability of the agreement. On a very basic level it can help strengthen the relationship of the parties by ensuring each understands its own obligations which in turn can help prevent simple misunderstandings from escalating into disputes.
Some contracts must be in writing to be enforceable
By law or for the purposes of registration requirements, some contracts must be in writing, such as: an assignment of the benefit of contractual rights such as a debt; assignment of certain intellectual property rights; a transfer of shares; and an agreement whereby an employee or worker receives a payment in return for agreeing to waive or settle a claim against their employer, to name a few.
A Properly Tailored Contract
We understand the aim of our clients is to protect the commercial relationships they invest time and energy cultivating. They want not only to win that business but after doing so, they wish to protect their own interests too, as far as possible. Therefore, the next step is to get a properly tailored, enforceable contract in place: one that defines the rights and obligations of both parties around aspects such as charges and payment, time for performance, data protection, intellectual property, liability and termination rights.
Although most users of your website will not read your terms, this is an important part of your business. Having to argue in court is expensive, so a little investment to avert the risk is a pragmatic approach. This article highlights some of the most common points which your terms should cover so that the risks explained below do not crystallise.
If your business involves sending personal data outside the UK and EEA, you may be aware of the need for a transfer risk assessment (TRA) to demonstrate that you have properly considered and mitigated any associated risks.
When it comes to commercial negotiations, they often don’t turn out the way you had hoped and then there is no going back. Instead of struggling on your own, losing a lot of management time and still not being sure you have got the best deal, let us negotiate for you.