Do contracts have to be reduced to writing to be valid and binding?
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15th April 2019There is a common misconception that exists amongst clients that an enforceable contract only comes into existence when the terms of the contract are reduced to writing and recorded in some form of a written document.
This is not so. It is only in the case of the sale of immovable property (for example your house) that the law requires the contract to be reduced to writing. For all other aspects where people or companies have dealings with each other that give rise to bilateral rights and obligations there is no requirement that the terms of the agreement have to be reduced to writing to be a valid and enforceable contract.
Very simply put, a contract is an offer by one party to do something and an acceptance by another party of that offer. Once the offer is accepted a valid and enforceable contract comes into existence, regardless of whether or not the contract is reduced to writing. Neither the offer nor the acceptance are required to be in writing. It is just required that there is a valid offer and a valid acceptance regardless of the format in which that offer or acceptance exists.
A contract, therefore, can be concluded orally between parties. It can even be concluded tacitly, in other words through the conduct of parties. In both of these cases an enforceable contract comes into being without there being a written contract.
Despite it not being a requirement in law, it is always advisable to record a contract in writing and clearly set out the terms and conditions. It is also advisable to consult an attorney in this regard in order to protect your interests and avoid complications.
This article is for general information should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact an attorney for specific and detailed advice. Errors and omissions excepted (E&OE)