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What makes a contract legal and binding?

Years ago, a person's word was as good as gold. A handshake or a simple nod of the head could signal two parties agreed, and they depended on one another to keep up their ends of the deal. Today, with disagreements played out on social media and lawsuits over spilled coffee, do you trust your Florida neighbor in the same way neighbors used to trust? 

It is a valid concern that people may not keep their word as much as they once did, but a bigger question is whether a spoken agreement is, in fact, a contract. Could it be that an oral pact you make with a friend, neighbor or business colleague simply cannot stand as a legally binding agreement in a court of law?

Contract Basics

The Florida Bar addresses this question, pointing out that you and the other party both "must have the capacity or legal ability to enter into [a] contract" before the agreement is binding. What is also necessary is "an offer and acceptance." You both must have agreed on some exchange that will take place, a product or service, for example, in exchange for money.

Spoken versus Written Contracts

The Bar says some oral agreements are legally binding but not all. Those involving real estate or services not available within a year's time must be on paper.

Many others can simply be spoken agreements, but remember what you have probably heard a thousand times: "It is always better to have it in writing." Even oral contracts that Florida courts can enforce as legal and binding would be best as written documents. The Bar says written contracts simply help "avoid disputes and litigation."

Note this information only intends to educate regarding contracts and does not aim to provide legal advice.

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