A commercial contract is a legally binding agreement between two or more persons or entities. The reason oral contracts can be a problem is that parties change, memories fade and, yes, people lie. Without written agreement, a judge or jury will find it difficult to determine which version of events should believe in a “your word against it” scenario. Written contracts may consist of a standard agreement or a letter of confirmation of the agreement. There is no particular format that must be followed by a contract. In general, it will contain certain concepts, either explicit or implicit, that will form the basis of the agreement. These conditions may include contractual clauses or contractual guarantees. A contract can be used in almost any transaction. It may relate to a service, sale or transfer of ownership of the property. Contractors can be individuals, businesses or governments. There may also be more than two contractors. As a general rule, only contractors have rights or obligations under the agreement. Some agreements can only be partially verbal.

For example, there may be supporting documents such as an offer or a list of specifications that are also part of the contract. You should at least note the most important points you have agreed with the tenant so as not to rely on memory. Keep all documents related to the contract. The paperwork can be used later in conversations with the tenant to solve a problem. If the dispute becomes serious, it can be used as evidence in court. Clear and concrete concepts not only guide performance and limit ambiguity in the event of litigation, but the negotiation process can also clearly indicate whether there is an agreement to be documented. The issues that often leave oral contracts unanswered often lead the parties to start the delivery as part of an “agreement” only to find – once time and resources have been spent – that there are major disputes between them. Negotiations on a written treaty would probably have revealed these issues very early on.

The “devil is in the details,” in other words. The benefits of a detailed, clear and well-written contract are immense. Making written agreements with parties with whom you deal, including customers, suppliers, contractors, partners, shareholders, LLC partners and investors, should be a basic business practice.