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What are the advantages and disadvantages of a verbal contract?

Written contracts have been used in business for thousands of years, so it may come as a surprise to learn that contracts based solely on the spoken word are still sometimes in use. These are known as oral, or verbal, contracts. Can a verbal contract be enforced in Atlanta if there is a contract dispute?

Verbal contracts may hold up in court in some cases, according to the Houston Chronicle. You might first want to consider whether doing business with a verbal contract is a good idea. Many people agree verbally on the terms of a business agreement if it seems awkward or unnecessary to them to get it in writing. For example, you might want a friend or relative to do some contracting work on your home or office. It might seem a little overboard to outline a contract with someone you personally know and trust. This could work out fine if nothing goes wrong. However, if there is a dispute, you may have difficulty defending your side if the disagreement goes to court.

This is why it would more likely be in your best interests to have a written contract, even if the person doing business with you is your friend. A contract does not have to be complicated, but can simply state the nature of the job or sale, as well as the price you negotiated. In some situations, such as with long-term employment or a sizeable sale, only a written contract would be valid anyway.

The bottom line is, you might find there are more advantages to getting your agreement in writing, no matter how casual the situation. Doing so may protect both sides legally in the future. This information, however, should not be substituted for legal advice.

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