Contracts - An Historical Perspective

May 15, 2019

Contracts have been an important part of personal and business life since the dark ages of English common law (the ancestor of the U.S. legal system) hundreds of years ago. In medieval times it was common for contracts to be oral (verbal) as few people except nobility and clergy could read and write, and a common law system of law and procedure developed for judging oral contracts, the remnants of which are embodied in U.S. law.

While oral contracts may have a place in modern life (do you have a written contract for your neighbor teenagers to cut your grass or shovel your snow?), the conventional practice is to have written contracts for significant personal and business undertakings.  The first decisions to make are which transactions require a written contract and what assistance is required in drafting or reviewing the contract.

In everyday life, many written contracts are thrust upon you, the impact of which may not be known in the absence of a failure to perform.  Think of the fine print on the back of a parking receipt, the sales documentation for your new car, the lease contract for your apartment, your credit card agreement, or various types of insurance contracts.  Many people accept these arrangements as a part of modern life with the expectation that things will somehow work out in the event of a problem.

On the other hand, many people seek advice on more complex matters such as the purchase of a house or business-related matters such as employment agreements, or when applicable, contracts related to the structure and operation of a closely-held business.

When applicable, advisors should be sought who are familiar with the law in the field of the contract to be prepared, such as real estate, business formation, operation and licenses, employment, etc. as the contract will inherently reflect the underlying law in the expression of the contractual undertakings.

For example, the contracts will typically address topics such as:

  1. The Parties
  2. The rights and obligations of the Parties
  3. The goods, services, or property to be delivered
  4. Representation, Warranties and Indemnities
  5. The consideration, such as money to be paid
  6. The schedule of performance and payments
  7. Term and Termination
  8. Rights on breach
  9. Applicable law and dispute resolution

In many situations which do not lend themselves to standard contract terms, an ounce of prevention may be worth a pound of cure in clearly expressing the undertaking in writing.  While oral contracts have their place, they can be difficult to prove, often lack implementing details and suffer from fading memories.

The lawyers at RCO Law can help with questions.

 

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