Oral agreements and written agreements are enforceable in Tennessee. Even so, it’s a good idea to put any agreement you enter into in writing and have the parties intending to be bound by the agreement (including yourself) sign it. It’s a great idea to consult an attorney when drafting an agreement so that a knowledgeable professional can properly advise you on the selection of terms of the agreement.
Oral agreements are very hard to enforce and the costs associated with trying to enforce an oral agreement can stack up quickly. This is because oral agreements are fundamentally flawed by their reliance on the memories of the parties to the agreement. Human memory can be compromised by a person’s perspective and has a tendency to change or fade with the passage of time; especially when relationships sour and disagreements arise.
Whereas, written agreements, if properly drafted, avoid problems inherent in oral agreements. Well-crafted written agreements are significantly better at identifying each party’s responsibilities, duties, obligations, and the consequences for each party should controversies occur. Furthermore, written agreements are much easier to enforce.
Importantly, in Tennessee, there are certain agreements that must be in writing to be enforceable. This rule is known as the Statute of Frauds and it exists because of Tennessee’s skepticism of human memory, Tennessee’s desire to protect certain agreements from fraudulent behavior, and a list of other practical considerations that recognize the importance of having written records of certain transactions.
The primary agreements that must be in writing in Tennessee ( T.C.A. 29-2-101) are:
- Contracts of suretyship; i.e. an agreement with a guarantor on a loan agreement;
- Contracts relating to real property – this includes any contract for the sale of lands, tenements (rental agreements for real property), hereditaments (inheritances), and any lease for a term longer than one (1) year;
- Any agreement made upon consideration of marriage;
- Any contract or agreement which is not to be performed within one (1) year from the making of the agreement or contract; and
- Loan agreements or loan contracts (this includes any amendments to the loan agreements or contracts).
However, not all contracts are created equal. It is always recommended to consult an attorney prior to signing any written agreement so that you can have a knowledgeable advocate review the terms of the agreement, represent you in any alterations that need to be made to the agreement, and so you may be properly advised about the consequences of the agreement.
Whether you are interested in creating a new contract, are seeking to enforce an existing contract, or have been asked to sign an agreement, give us a call today to set up your free consultation to see if Ben’s legal powers are right for you!