What the law considers a legally binding contract can become a difficult legal matter very quickly. In fact, it is likely not unrealistic to presuppose that individuals and corporations alike have spent billions of dollars on this very question.
Most business owners are aware that not all contracts have to be in writing for the law to consider them legally binding. Most are also aware that agreements between parties in emails are just as binding as “formally signed” contracts. However, there are certain kinds of contracts that must be in writing for the law to see them as “unvoidable.”
What is a “voidable” contract?
A voidable contract is one that either party can cancel at any point. Just because the law views a contract as voidable does not mean that it is not a contract at all. It simply means that either party involved in the contract can affirm or reject said contract whenever they like. This is a slim distinction, but it legally exists.
What kinds of contracts must be in writing for the law not to see them as voidable?
One example of a contract that should be in writing is a real estate sale. If one party makes an oral agreement to sell property to a second party, that first party can void the oral contract at will.
Other kinds of orally voidable contracts include agreeing to pay somebody else’s debts or a contract that takes longer than one year to finish. Projected lifespan matters, too: you must put a contract that will last longer than the life of the party guaranteeing it in writing.
