What are the benefits and advantages, if any, of an oral contract versus a written
contract? Why should oral contracts exist and be legally enforceable?
At first I would like to make a simple conclusion for the definition of the oral and
written contract: an oral contract, is a promise that has been plainly spoken and not
written down or partly in writing and partly dependent on spoken words; In contrast, a
written contract is a contract that has a promise made on it as well as serves as its own
proof that the promise was made. Technically, both oral and written contracts are
legally enforceable (Jeffrey, 2008).
There are several advantages and disadvantages exist both in oral and written
Firstly, written contracts can be expensive, especially if multiple contracts are
required; in some cases, a party may have to hire a lawyer to help draft the contract,
which spends lot of time and money for individuals and small businesses to
implement for every agreement. In addition, focusing on contracts draws attention
away from other activities that could help benefit the business.
Secondly, a request to enter into a written contract can harm the working relationship;
sometimes it implies that one person distrusts others. This assumption is particularly
true when people rely on goodwill and mutual trust to conduct transactions, or if the
two parties have a long-standing business relationship (Paine).
However, with oral contracts, one or both parties can forget or misrepresent a few
facts. In other words, oral contracts are sometimes subjective, leading to a lot of he
said, she said objectivity. Therefore, we have to collect the evidence for the
enforcement of an oral contract: such as witness testimony, prior dealing