Contracts are a part of almost every business deal. Whether you are selling a product or service or purchasing equipment and parts, you need to ensure a fair result. A contract is the best way to make sure that you get the results you expect in the timeframe that you want. A written contract protects both you and the other party in the agreement. It is enforceable under the law. However, generally, oral contracts are binding in Wisconsin under many circumstances.
- Written contracts are always preferable to oral agreements. If you must make an oral contract, follow it up in writing with an email that outlines your understanding. That way, you have some backup to provide if there is a problem later.
- When someone presents you with a contract, always read it fully. It is usually best to have your attorney review the document to make sure that your rights are protected. This is not always feasible with smaller contracts.
- Make sure you get answers to all your questions before you agree to a verbal contract. Many times, parties make oral contracts quickly and only later realize that they left out some essential information.
- A contract requires a meeting of the minds of both parties, regardless of whether the contract is written or verbal. If one party has one thing in mind and the other party something else, the contract is probably invalid.
- A contract requires that a party give something of value in return for something else. A contract is not valid if it does not have this critical element. A handshake does not necessarily mean that both parties understand the terms of the agreement.
Contracts Protect Both Parties
Contracts are designed to protect both parties. They provide everyone with the terms of the agreement which are legally binding. Both parties must fulfill their part of the bargain. If one party fails to do their part, they are in breach of the contract and the other party has the right to sue. A contract should explain how to handle a breach of contract. For instance, sometimes a contract requires you to enter into arbitration rather than handling the matter in court.
Wisconsin law requires that an oral contract have a “definite and assured promise and a meeting of the minds on key terms.” Even when you have utilized an oral agreement, you should give or get a receipt any time money changes hands. For example, you enter into a verbal contract with a supplier to provide you with packing supplies. When they deliver the supplies and you make payment, be sure to get a receipt, especially if you pay with cash. Paying with a check gives you a written record of the payment; however, the terms of the contract could still be in question.
Seek Legal Guidance
It is a good idea to consult with an experienced attorney to draft or review important contracts. If a dispute arises, take immediate action to try to resolve the matter before the situation escalates. Your lawyer will be instrumental in helping prevent contract problems and in negotiating a resolution when necessary.
To get help with contract matters, contact our experienced legal team at Moen Sheehan Meyer, Ltd today online or by phone at (608) 784-8310.