Considering closing a deal with a handshake instead of a written contract? Don’t do it! It’s very difficult to prove the terms of an oral agreement if differences arise, so don’t take a chance. While some agreements (such as real estate deals and contracts that cannot be completed within one year) must be in writing to be enforceable, you are well-advised to reduce all agreements to writing.

You may be tempted to make an exception for family members. Again, don’t do it! Memories fade over time, and clearly spelling out all obligations in writing will prevent future disagreements and unnecessary strain on family

relationships. Aren’t they tough enough without this additional stress?

While many well-crafted contracts include page after page of fine print and legal jargon, there are certain minimum terms that should be included in even the most basic contracts. Be sure to include:

n The identity of all contracting parties;

n The subject matter of the contract;

n All essential terms and conditions; and,

n Signatures of all parties.

When identifying the parties, it’s a good idea to include full legal names along with complete addresses. Be sure you know who you are dealing with.

If the other party is not personally known to you, don’t be afraid to require proof of identification. Be very detailed when describing the subject matter of the agreement. If you are selling real estate, include both the street address and the legal description. When renting a house, be sure to specify what is included with the residence, who can live there, and what alterations the renter is permitted to make. Is it the whole house or just the first floor? Are

there appliances?

Perhaps the most time will be spent determining what contract conditions should be included. Reduce all promises by either party to writing. Be specific and consider alternative outcomes. Spell out the total monetary obligations along with the expected time and manner of payment. Think about what will happen if either party defaults. Must the defaulting party pay the others’ attorney fees if you have to sue to enforce the contract? How – and where - will disputes be resolved (through mediation, in court, and in what state or county)? Bottom line: If you want a contract term to be enforceable, put it in writing!

Don’t forget to include the signatures of all parties. This means if Dad is helping Junior buy your house on contract, make sure Dad signs as guarantor. Likewise, when renting to more than one tenant, require all to sign the lease. In order to legally bind someone to the terms of the contract, you need their signature acknowledging their understanding and agreement thereto. It also makes sense to require all parties to sign in your presence or to have signatures notarized to avoid issues regarding authenticity.

There are lots of form contracts available online as well as software kits.

Be aware though that one size does not fit all. Each situation is unique, and your contract may benefit from a different approach than your neighbor’s. Consider consulting with your attorney to be sure that you are fully protected and comply with Indiana law.

Always remember that you get what you pay for, and that includes free legal advice!

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