Are handwritten contracts legally binding?
When most people think of a contract, a formally-typed, professional-looking contract usually comes to mind. It turns out, while they may not be used too often nowadays, a handwritten contract can be as valid as one that’s typed.
In this article, you’ll find the basics about contract law and will be able to answer the question: Is a handwritten contract legally-binding?
Are handwritten contracts legally-binding?
The short answer is yes. Handwritten contracts are slightly impractical when you could just type them up, but they are completely legal if written properly. In fact, they’re even preferable to verbal contracts in many ways.
Written contracts vs verbal contracts
A written contract, i.e. a contract that is typed, printed or handwritten, is not necessarily more valid than a verbal one that has only been stated orally. If the correct procedures are followed, then a lot of businesses could feasibly use verbal contracts for many of their operations.
However, this doesn’t mean that oral agreements are as good as written ones. There are many reasons why written contracts should be favored when conducting business, the most obvious being that it’s difficult to prove what was agreed upon when no documentation physically exists.
Advantages of using written contracts
When compared to an oral contract, there are several reasons to use a written format, either typed or handwritten. For example:
- Verbally-stated terms could easily be misunderstood or even forgotten by any of the parties.
- It’s easier for someone to lie about the original contract if it was only orally agreed upon.
- One or more of the parties could potentially go into administration or cease trading for any reason halfway through the contract.
- There are several types of contracts that have to in writing for them to be recognized as legally valid.
For these reasons and more it’s always a good idea to have your business agreements in writing. Written contracts give you a reliable set of terms, obligations, and outcomes that you can easily argue in court if need be.
An oral agreement is difficult to prove, so if you end up in court over a contract dispute you don’t want to be relying on a conversation you had a year ago as evidence of an enforceable contract.
The Statute of Frauds and how it affects written contracts
As mentioned above, some kinds of agreements need to be in writing to be legally valid. This is dictated by the Statute of Frauds. State law varies, but the Statute of Frauds means the following agreements need to be in writing:
- Leases lasting more than one year.
- Sale of something over a stated maximum value.
- Any transfer or sale of real estate.
- Contracts lasting beyond a party’s death.
- An agreement for someone to pay someone else’s debt.
The law may state that these types of contracts need to be in writing, but it doesn’t usually say anything about them having to be typed.
This means that a handwritten contract is a valid contract in the eyes of the law, although you should always get legal advice and check your state’s laws.
Reasons not to use handwritten contracts
If handwritten contracts are typically legally binding, why wouldn’t you use them? Well, the main drawback is how impractical it is nowadays to have someone write an entire contract by hand. Mistakes can’t be edited easily, and it won’t look anywhere near as professional to a potential client or customer as a nicely-typed document.
Producing a legal contract is far simpler today than the days when handwritten contracts ruled. Many companies now offer software specifically designed to make a contract and business document creation, signing, and sending easier.
Companies such as PandaDoc contract management software allow users to build custom documents from a template library. The cloud-based interface supports drag and drop additions of useful elements like pricing tables, signature fields, images, videos, and more.
eSignatures can be added with a simple click, contracts can be sent out for signing just as easily, and their status can be tracked right within PandaDoc. This certainly beats handwriting every contract from scratch.
Legal but not practical
Handwritten contracts are becoming obsolete. There are few organizations that still choose to routinely use them because of their impracticality. We suggest using typed contracts to conduct your business and using specialized software to create professional-looking, legally-binding contracts in a matter of minutes.