goods for more than $500 must be in writing. An oral contract for a term greater than one year or a price greater than $500 does not void the agreement or render it illegal, but if one party refuses to perform, then the other will be unable to legally enforce the agreement.5
Contracts are enforceable only if they can be proven. Oral contracts may not be enforceable, since a great deal of detail is often lost in the course of remembering a conversation. The best practice is to put the contract in writing, as a written contract functions not only as proof but also to clarify the understanding of the parties regarding the agreement and the terms of the agreement.6
A contract should be written in simple language that both parties can understand and that clearly spells out the terms of the agreement. The contract should include (1) the date of the agreement; (2) the identification of the two parties (e.g., the buyer and seller); (3) a description of the goods or services; (4) the price or other consideration; and (5) the signatures for the parties involved. To supplement these basics, the agreement should include other terms that might be applicable such as pricing arrangements, payment schedules, insurance coverage, consignment details, and the like.7
Where a contract has been established, if one of the parties fails to perform in accordance with the agreement, then a breach of contract may occur. In case of breach, the injured party may bring an action for damages, rescind the contract, bring a suit in equity to obtain specific performance, or commence a proceeding to obtain relief from an administrative agency of the government.8
The term agency ordinarily describes a relationship in which two parties agree that one (the agent) will act as a representative of the other (the principal) in negotiating and transacting business.9 An agent differs from an independent contractor in that the principal, who controls the act...