Reasons for Written Contracts Essay - 275 Words

Reasons for Written Contracts (Essay Sample) Content: Reasons for Written ContractsNameInstitutionIntroductionWe often hear business people saying that they have a reached a deal or they have shaken hands and are ready to do an associate business. This may have been in practice since the time of our grandfathers when they could make contracts through shaking hands. The society has however, grown and become complex and large and businesses are done on more than a hand shake (Cannon, Achrol Gundlach, 2000).A contract is a legally binding agreement. A contract can be either a written or unwritten, mostly referred to as oral contracts (Cannon, Achrol Gundlach, 2000). Many people opt for written contracts because of many reasons. This research aims to examine closely the advantages of having written contracts as compared to other types of contracts. It will also seek to find information on instances where businesses have failed because of lack of written evidences for the contracts.To begin with, a written agreement acts as an evidence of what was initially agreed on. With time, memories of the parties that had made an agreement will start fading away and become difficult to keep a track of what was agreed on (Cannon, Achrol Gundlach, 2000). A written contract will therefore serve a purpose of storing the agreement. This will help in eradicating confrontations and unnecessary confrontations whereby each party will be claiming that the other party in agreement had said. A written contract will in this cases act as prove of any doubt and will provide a clear evidence of what was agreed to. In the current society, it is good having a written agreement so that incase of anything, unsatisfied party can move ahead and file a suit at the court of law (Cannon, Achrol Gundlach, 2000). A court of law will therefore use the written document as a prove of allegations and any matter whatsoever will be solved. This will help in curbing the acts of conmen in a business environment (Hart, 1995).The second reason fo r making contracts is that the parties bound by a contract will be able to agree and address issues that could have been overlooked if there was no agreement. This applies in a situation where a dispute results in litigation (Cannon, Achrol Gundlach, 2000). When there is a written contract, a prevailing party will be able to collect his or her attorneyà ¢Ã¢â€š ¬s fees. In this case a written contract serves as a legal document that will serve as a prove that the prevailing party is justified to collect the attorneys fees since the agreement has been proved to be legally binding (Cannon, Achrol Gundlach, 2000).It is absolutely necessary to have a written agreement in some instances. The Statute of Frauds Law has it that some specific contracts including those agreements that cannot be performed within one year from the date of making. The law also requires s that a written agreement should exist for the conveyance of real estate. This law will not be enforceable if there is no wr itten agreement therefore it is necessary for parties making these type of contracts to have their agreements in writing (Cannon, Achrol Gundlach, 2000). The reason behind necessity of a written contract on this concept is therefore to facilitate enforcement of law and that no claims made are unlawful. This will ensure that there is legal and lawful business environment. When businessmen make written contracts, there will be minimal cases of fraud and the court of law will find it easy administering justice to conmen and fraudsters (Cannon, Achrol Gundlach, 2000).In addition to the above reasons, a written contract creates an impression to the parties on the significance of the commitments they are about to agree on. Once all the parties have understood the significance of the commitments they are to make, then it will make them stick to the agreement and work towards fulfilling them (Rousseau, 1989). The process of contract making also defines what is at the stake and therefore c reates a basis for both parties to understand what the contract entails and the consequences that one will face in case of a breach of a contract. Once the two parties have familiarized themselves with the content of the agreement, they will now be able to go by the contract (Rousseau, 1989). On the other hand, the court of law will have the full consent of the agreement in case any of the parties default to fulfill its promise. According to Cannon, Achrol Gundlach (2000), this in one way or the other ensures that the parties in an agreement fulfill their promises.A written contract also compels the parties in the agreement to contemplate the deal longer than it takes to agree on (Cannon, Achrol Gundlach, 2000). This allows for more time so that understandings can be flushed out and tabled among the parties and their respective attorneys. This will help in avoiding interpretations of a deal which may differ significantly (Campbell III Kamlani, 1997). This process of making an agr eement may seem to be long but at long last a defined and a good agreement will be arrived at. It will therefore provide basis for both the parties involved in the agreement and the attorneys to have a clear understanding of the contract (Hart, 1995).Another advantage worth taking into account is that, when a contract is in writing, both parties involved in the agreement will be able to understand their obligations (Anderlini Felli, 1994). This will therefore show the partiesà ¢Ã¢â€š ¬ obligations and avoids incase a court enforcement is required. The court will be able to make a ruling on any dispute that may arise because both the parties and the attorneys have a full understanding of the agreement made (Hart, 1995).When it comes to a business contract, it should be written because it contains the terms and conditions of any business that could be carried out including service delivery and sell of products (Rousseau, 1989). This will help the parties involved in the contract to avoid any kind of misunderstanding that may arise in oral contracts. When misunderstandings are avoided in a business environment, for instance, a good relation will be enhanced and all parties associated with a certain business will maintain their friendship (Anderlini Felli, 1994).In a business employment sector, a written contract is required so that both the employer and the employee have a clear understanding of the expectations that each one of them have of each other and this will help the employer to limit his or her liability in many important ways. On the other hand, the contract will contain the details about the benefits that the employer will offer an employee as compensation (Anderlini Felli, 1994). This will act as a security for the employee when he or she is working and therefore assured of his payment and any benefits whatsoever (Rousseau, 1989).A written agreement creates group recognition and legitimacy (Hart, 1995). This will work in situations where groups may be interested in borrowing loan from financial institutions. The lenders will require a written agreement between the group and the guarantee so that the lender can identify the group as recognized by the outsiders. In some ...