Question

summarize some of the advantages and disadvantages of having a legal contract. Discuss the differences between written and an oral contract.

Answer 1

Legal Contract refers to the agreement between two or more parties which is enforceable by court of law.

Advantages of having a legal contract are-

• Rights – Legal contracts clearly defines the rights of both the parties. Each party has to go by such mentioned rights only; they cannot act beyond those rights.
• Resolve the disputes – Each party act as per the terms and conditions of their contract. In case of any dispute, any party can file a suit in court against other party. So, the fear of getting involved into a case saves lot of disputes.

Disadvantages of having a legal contract are-

• Mistrust – When two parties are having good relationship between them. In such case asking for a legal contract by any of the person shows the sense of mistrust. This can create problems in their good relationship.
• Time consuming – Getting a legal contract among two or more parties involves lot of time. As lot of paperwork and formalities are required to be fulfilled by all the parties in concern.
• Costly – In order to enter into a contract, parties might have to higher agents or lawyer to draw up the contract. They also charges money for this. This could be am expensive thing for the parties.

Legal contracts can be oral or written. Differences between written and an oral contract is mentioned below-

Basis	Written Contract	Oral Contract
Legal Document	It is an agreement in which terms and conditions are printed on legal document signed by both the parties	There is no such legal document. Parties in agreement have verbal communication regarding the terms and conditions of contract.
Errors or Frauds	The errors and frauds are less as everything is written in the contract.	Chances of errors and frauds are more because any person can later on deny from some terms and conditions. Terms and conditions are present only in the memory of every party.
Time and cost	This involves more time and cost.	Getting into oral contract does not involve much of time and resources.
Breach of contract	In case of breach of contract it takes generally longer time to sue any party as all the legal formalities have to be nullified and all the terms of contract are considered first.	In case of breach of contract it takes shorter period to sue any party. Less legal formalities are involved in this.