What Is a Written Contract?
A written contract generally refers to a written document outlining an agreement between two parties. The parties can be individuals, businesses, or organizations. All factors or portions in the agreement must be included in the agreement, and each party involved has to sign the document in order for it to be considered valid.
In many cases, a written contract is typed and submitted by a licensed attorney. This doesn’t have to be the case, as simple contracts can be written by the individuals involved. To ensure their validity, contracts written in this way should be approved by an attorney. Most simple written agreements will hold up in a court of law, but it is a good idea to double check.
The purpose of the written contract is generally to ensure that both parties fully understand the agreement and are committed to complying to its stipulations. Contracts may between a buyer and a seller or a product, between someone hiring the other person to complete a specific job, or between two parties who are undergoing a business venture together. When each individual or business signs the contract, he or she is acknowledging than an agreement was made and that he or she understands the responsibilities involved.
A written contract also acts to protect both parties from breach of contract. This means that if one person backs out of the agreement after services or other obligations have been rendered by the opposite party, legal action may be taken. For example, if a company completes work for another company and is not paid within an acceptable time frame, a lawsuit can be filed in order to claim the money earned. The written contract is generally used as evidence of an agreement and of the details of that agreement.
Those who are self-employed or who perform work as independent contractors should have a standard agreement or contract written up for each client or customer to sign. This ensures that payment will be made for all work completed, and allows the contractor to pursue legal action in the case of nonpayment. In most cases, it is hard to prove an agreement without a written contract in place. The standard agreement should be reviewed by an attorney.
Requesting a written contract can also give indication of a business’s or individual’s character. If someone refuses to sign an agreement which outlines the details of an arrangement, it is a good sign that he or she may not follow through with obligations. Most legitimate operations will be willing to sign a contract.
Written By: Erin J. Hill on wiseGEEK
We also wanted to add that written contracts help to avoid future misunderstandings between you, the contractor, and any third party (sub contractor) involved. Always be sure that clarify specify what the prices and fees will be for the work done, when installment payments will be made, and what constitutes the completion of the project. Just having these simple items organized in your contract will surely reduce the risk of making costly and timely mistakes. It also helps avoiding litigation and being in court. Take your time writing all contracts and seek a lawyer’s advice if need be.