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 Avoiding Lawsuits with Contracts

As a contract and business attorney, I see a good number of people get sued.  Sadly, many of these lawsuits could have been avoided by having an agreement or having a better agreement.

A surprisingly large number of business agreements are not in writing.  At least, a surprisingly large number of lawsuits involve oral agreements… or amendments… or revocations…

The reason that a disproportionate number of lawsuits involve oral agreements is that, ultimately, they come down to one person saying one thing and another person saying something else.  Who will the judge or jury believe?  Who knows?  All you can do is pay a lawyer tens of thousands of dollars and wait to find out.

That does not mean that oral agreements are not binding.  Under the law they are.  Usually.

There are some exceptions.  The exceptions are called the “Statute of Frauds”.  These specific types of agreements MUST be in writing.  Even if everyone agrees that an oral agreement was made, if these specific kinds of agreements are not in writing… there is no agreement.

The big example is “Real Property”.  “Real Property” is land, houses, real estate etc.  It has to be in writing.  Another interesting example are contracts that can not be performed within a year.  Which seems straightforward.

However, what if a contract might be performed in a year, but might not?  Doesn’t count.  What if a contract is for someone to do something for the rest of their lives?  Doesn’t count (they might die, yikes!)  This is just the type of situation for which San Antonio TX business lawyers need to be aware.

Prenuptial agreements also must be in writing.  That means an agreement that can not be performed in a year.  That does not mean an agreement that might not be performed in a year.  It means an agreement that can not be performed in a year.

This seems straightforward.  Sometimes it is not.  A contract for someone to do something for the rest of their lives… might be performed in a year.  A 5 year lease… will not be performed in a year.  Unless there is some language somewhere in the fine print giving one party a possible escape clause.  This escape clause can even, in this context, be used against the party that it is intended to help.

Basically, there are two types of contracts.  Contracts that must be in writing and contracts that should.  Even if you trust the person you are dealing with… get it in writing.  It is easier to have a written explanation of what you are entitled to get and obligated to give.  Much easier than getting sued, possibly losing a lawsuit and probably losing a friendship down the road.

Thanks to our friend and blog author, Stephen Foster of The Foster Law Center, for his insight into the importance of contracts.