Does a Legal Agreement Need to Be in Writing?
In an earlier blog, we discussed the basic requirements of a valid and enforceable contract:
- There must be an offer and an acceptance, known legally as an agreement.
- There must be consideration, which means all parties must give something of value in the bargain.
- The contract must be for a legal purpose. You cannot enter a contract to commit an illegal act.
- Each party must have contractual capacity, which means they can understand they’re entering an agreement and the terms of that agreement.
- The agreement must be entered voluntarily and not as the result of fraud, misrepresentation, undue influence, or duress.
While many kinds of oral contracts have legal force, there are specific instances where a contract must be in writing in order for it to be enforced. Those situations are set forth in each state’s “statute of frauds.” In New Jersey, the following types of contracts are must be in writing:
- Most contracts involving the transfer or granting of an interest in land or real property, including buy-sell agreements, mortgages, easements, leases (exceeding three years in length), and restrictive covenants
- A promise to pay the debts or obligations of another person
- Prenuptial agreements (made after February 19, 2007)
- Loans, grants, lines of credit, and similar transactions where the amount extended exceeds $100,000 and the lender is in the business of lending money
- A promise not to exercise a legal right, including a contractual right, where the amount in controversy exceeds $100,000
- Real estate broker commission agreements
The Uniform Commercial Code (UCC), which governs business agreements, also requires that a contract for the sale of goods involving a sum greater than $500 must be in writing. The UCC also mandates that certain security interests may not be enforced based on an oral agreement.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we provide comprehensive contracts counsel to businesses and business owners. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. We are currently available by phone, text message, or videoconference only. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
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