I am a small business owner and I really don’t have the time for all the paperwork involved with having contracts for everything I do. Am I putting myself at risk by not doing this? If my contracts are not in writing does this mean I won’t be able to enforce them?
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
Answer by Dilani Mudalige, Yokine 6060 WA
- Not all contracts have to be in writing to be enforceable but certain contracts such as those dealing with land do have to be in writing.
- It is more difficult to enforce verbal or informal contracts. The terms of informal contracts may not be easily discernible. If there are forms involved such as purchase orders and invoices which contain their own terms this may give rise to what is called a 'battle of forms' where each party exchanges documents with different terms. This makes it difficult to determine which terms actually form part of the contract. In this case there is a risk that you end up having to do business under terms which you did not agree to.
- While time constraints on small business owners are understandable it is a good idea to reduce your exposure to risk by having your terms and conditions of business drawn up in the form of a standard contract which can be used for your regular business transactions.
- It is important to make sure you have your high value or key transactions covered by a written contract.