Many contracts have dispute resolution provisions allowing you to preselect the mode and location should any disagreement regarding the contract or a breach thereof arise. You can elect arbitration, mediation, small claims court, and/or normal civil court as the mandatory method of bringing claims pursuant to the contract. You can also select the location where the agreement may be enforced. This is especially useful if the parties to a contract do not reside in or do business in the same city, county, or state.
People frequently have oral miscommunications. An attorney can clearly state the terms of an agreement in a way so that both parties understand what they are promising. Contracts can also include a "merger" clause that states that the written contract reflects the entirety of the parties' understandings. This ensures that any previous oral promises or other agreements are not enforceable once the contract is signed.
More Difficult to Lie About the Agreement
The other party or parties to the contract cannot contradict the terms if you have a fully executed, written agreement. With oral promises and terms, parties may attempt to claim that the terms were different than the original agreement. A written contract avoids someone deciding they want to get out of a contract and lying to be able to do so.
Easier to Enforce in Court
If the party contracting with you breaches your agreement and you seek to enforce it through any means of dispute resolution, you have to be able to prove a contract existed. If you claim there was a contract executed and the other party claims there wasn't, and you have no written agreement, it can be difficult to prove the existence of the agreement, let alone the actual terms of it.
Can Mandate Changes Be Made in Writing
A contract can specify that changes to the terms of it are allowed only through specific means. For example, most contracts include sections only allowing modification in writing by agreement by both parties. So future oral promises will not be enforceable and all future terms must follow these procedures or they will not be enforceable. This prevents a party from claiming that there was an alteration of the agreement. It also avoids miscommunications about the parties' intent to alter an agreement.
People Are More Likely to Uphold Their Obligations
People are more likely to abide by the terms of a legally sound, written contract. People know there can be serious consequences for breaching a contract. A written contract is solid evidence in court and most parties take their obligations more seriously when they've signed a contract drafted by an attorney.
Contracts Can Consider Unusual Situations
Contracts memorialize terms that parties would not otherwise consider or remember by the time the terms matter. Lawyers are trained to think of the problems that may arise in your business or other contractual relationships. Whether it's how the contract can be terminated or how notice must be provided, many parties to contracts would not normally discuss these types of issues and even if they do, they may not accurately recall what they agreed to by the time they want to enforce the agreement.
Some Contracts Must Be in Writing
Certain contracts are unenforceable unless they are in writing. The California Civil Code codifies a concept called the "statute of frauds" that invalidates oral contracts for certain situations. For example, an agreement for the sale of real property, such as your home, must be in writing according to California Civil Code section 1624.
You Appear More Professional
Written contracts professionally prepared by attorneys not only legally protect you, but also make you appear more successful as a business or business person. Businesses that do not have contracts are generally newer, small businesses. Having contracts will make you appear more established and competent, which will make your clients or those you contract with more likely to give you the respect of a successful business.
Laws Are Constantly Changing
Even if you had a great agreement 10 years ago, you should periodically update it. New laws are passed and the courts hand down rulings on many issues. A contract that at one time afforded you protection or was enforceable may no longer be sufficient. For example, there have been a number of recent decisions clarifying when arbitration provisions are enforceable or unconscionable. An attorney's knowledge of new laws is extremely important when drafting a contract.