Contract Basics
Published on:
October 20, 2023
12min read

The Importance of Written Contracts

Luciana Gasser

The Importance of Written Contracts: Your Guide from Cheers

Understanding when a contract should be in writing isn't just a smart move—it's often a legal necessity. With CheersContracts at your side, navigating this legal labyrinth becomes straightforward. Here's a run-down of key contracts that must, or at the very least, should be written.

In the UK,

Many types of contracts can be made orally and still be legally binding. However, certain contracts must be made in writing according to various laws and statutes to be enforceable. Some of these include*:
  1. Property Contracts (Law of Property Act 1925): Contracts for the sale or disposition of an interest in land must be in writing and signed by the person against whom the contract is being enforced or by their authorised agent.
  2. Consumer Credit Contracts (Consumer Credit Act 1974): Most consumer credit agreements must be in writing, and certain information must be clearly set out in the agreement.
  3. Company Contracts (Companies Act 2006): A contract for a company to purchase its own shares must be in writing. Furthermore, pre-emption agreements related to share transfers also need to be written.
  4. Contracts of Guarantee (Statute of Frauds 1677): A contract where a guarantor agrees to cover a debtor's obligations if they fail to repay them must be in writing.
  5. Contracts for the Sale of Goods (Sale of Goods Act 1979): While contracts for the sale of goods can be oral, the Sale of Goods Act 1979 provides that, in case of a dispute, the burden of proof is on the party asserting the existence of the contract if it is not in writing.
  6. Employment Contracts (Employment Rights Act 1996): Every employee has the right to a written statement of the particulars of their employment.

*This list is not exhaustive, and there might be other specific situations or types of contracts that require a written form under UK law. Always consult with a legal professional to make sure your contracts comply with all relevant legal requirements.

In many European jurisdictions,

A number of contracts must be in writing according to local laws or the broader standards set by the European Union. Here are a few common ones:
  1. Consumer Contracts: Many EU directives, including the Consumer Rights Directive (2011/83/EU), require certain information to be provided in writing or another durable medium in consumer contracts. This applies to distance contracts, off-premises contracts, and others.
  2. Real Estate Contracts: In many European countries, real estate contracts must be in writing. This typically includes contracts for the sale, lease, or other transfer of an interest in real property.
  3. Credit Agreements: The EU Consumer Credit Directive (2008/48/EC) requires credit agreements to be in writing. This covers agreements related to credit cards, loans, hire purchase agreements, and overdrafts.
  4. Insurance Contracts: Insurance contracts and the details of the terms and conditions are often required to be in writing, under various national laws and regulations across Europe.
  5. Employment Contracts: The Written Statement Directive (91/533/EEC) requires employers to provide employees with written statements of the terms of their employment.
  6. Distance Selling Contracts: The EU’s Directive on distance selling (97/7/EC) requires that consumers be provided with written confirmation of certain information related to the contract.
  7. Package Travel Contracts: Under the Package Travel Directive (2015/2302/EU), travelers must receive all the contract terms and pre-contractual information on a durable medium, such as paper or email.

Property Contracts: Ensuring Your Piece of Earth

When it comes to property, the stakes are high. According to the UK Law of Property Act 1925, contracts for the sale or other dispositions of an interest in land must be written. This ensures clarity and prevents disputes. You can trust our selection of property contract templates to help guide you through the process.

Consumer Credit Contracts: A Matter of Trust

The Consumer Credit Act 1974 mandates that most consumer credit agreements be in writing. This outlines the obligations and rights of both the lender and the borrower, fostering trust. With CheersContracts' consumer credit contract templates, you're well-covered.

Company Contracts: Paper Trails are Paramount

The Companies Act 2006 requires certain agreements, like a company's decision to purchase its own shares, to be in writing. Similarly, share transfer pre-emption agreements must be written. Our collection of company contract templates ensures that your company stays within the boundaries of the law.

Contracts of Guarantee: Putting It Down in Black and White

If you're stepping in as a guarantor under the Statute of Frauds 1677, know this: the contract needs to be in writing. It not only delineates your liability but also reassures the other party. Use our guarantee contract templates for a streamlined experience.

Sale of Goods: Clarity Over Conjecture

Although the Sale of Goods Act 1979 allows for oral contracts, having a written one helps when disputes arise. So, save yourself a potential headache and consider using our goods sale contract templates.

Employment Contracts: The Foundation of Fairness

Under the Employment Rights Act 1996, every employee has the right to a written employment contract. It's the foundation of a fair workplace, outlining the responsibilities, rights, and redressal mechanisms. Check out our employment contract templates for an employee-friendly environment.

In summary, a written contract is not just a 'good-to-have'; often, it's a 'must-have'. It protects your rights, defines your obligations, and provides a safety net in case of disputes. With CheersContracts' wide range of customisable templates, secure e-signature solution, and insightful analytics, managing contracts becomes simple, seamless, and stress-free.

Navigate the world of contracts with confidence. Explore more about contracts and their necessities in our informative blog section. And remember, when in doubt, put it in writing!

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