Growing up in north Alabama, I have heard a lot of people say they prefer to do business with a handshake and a promise—in a perfect world, we could always trust someone’s word. What happens when the other person does not follow through on their promise? If you want to hold the other person to their accountable, you may have to have a written contract. In fact, Alabama considers some agreements to be legally void if they are not in writing.
Under Alabama law, written contracts (or a writing signed by the defendant that describes the agreement) are required if the contract:
- Will take longer than a year to be performed (weddings and events, for example);
- Is for goods valued at $500 or more;
- Is related to marriage (prenuptial agreements);
- Is related to the sale of land;
- Is for a lease for longer than one year;
- Is to promise to pay the debt of another person;
- Is an agreement related to a will;
- Is related to lending money or changing an agreement to lend money, except for consumer loans where the principal financed is less than $25K; or,
- Is for the purchase of a security that is not listed on a national stock exchange or certain securities markets.
Everything in the list is from Alabama’s ‘Statute of Frauds,’ except for 2, which is from Alabama’s Commercial Code. The Statute of Frauds is named that because it relates to things that have a high likelihood for fraud. The first statute of frauds was created in 1677 by the Parliament of England. The Statutes were created to keep the court from becoming a place where a person could falsely claim a legal right to something.
Basically, the statutes were created to make someone prove they have a right to the property by a writing that contains the promises and the money (or valuable property or service) with the defendant’s name, signature, and date.
What if you all you have is a verbal contract? Sometimes a contract claim that is required to have a writing can be heard by a court without a written agreement. You need a lawyer, and it may not be as expensive as you think. Depending on the circumstances, it may only require a phone call or letter from an attorney to motivate them.
If you think you may have a claim against a person or business, you received a letter from a lawyer, or someone is suing you or your company, you Michael Law Firm, LLC may be able to help. If you are ready to fight back, schedule a free consultation by calling (256) 284-7471 or email info@michaelfirm.com.
This article is not legal advice, and it is not a substitute for legal advice. Michael Law Firm, LLC does not answer legal questions on public forums. No attorney-client relationship is formed by interaction on public forums. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.