Question

Smith and Jones entered into an agreement in which Smith agreed to sell is watch to Jones. The two parties wrote all the terms of the contract on the back of an old envelope. They both signed the agreement. When the time came to execute the contract, Jones claimed he was not bound by the terms because the law required all contracts to be formally drawn up on pre-printed documents. Was he correct? Why or why not?

Answer 1

As per US Contract Law, a contract need not be in writing to be legally enforceable except in following cases:-

• Land, including leases over a year and easements
• Suretyships (promises to answer for the debts, defaults, or miscarriages of another)
• Consideration of marriage (not to actually get married but to give a dowry, for example)
• Goods over a certain amount of money (usually $500, as in the UCC)
• Contracts that cannot be performed within one year

In above exceptional cases the law requires the contracts to be in wriiten form to prevent any fraudulent activities.

Present sceanrio may fall in exceptions if the value of watch exceeded $500. If the value of watch does not exceed $500, Jones contention claiming that he was not bound by contract is incorrect.

Also,considering that the contract is handwritten Jones contention that the contract should be printed on pre printed document is incorrect. Handwritten contracts are also valid.