“An honest man’s word is as good as his bond.”
Contracts may be oral or written. While different rules apply to proving each, one type of contract is not necessarily more enforceable than the other. Under appropriate circumstances, oral contracts are just as enforceable as written contracts.
What is a contract? Simply stated, a contract is an agreement between two or more parties. For a contract to exist, there must be an offer, an acceptance of the offer, and consideration. An offer is a proposal to enter into a contract on the terms contained in the offer. An acceptance is an expression of agreement to the terms of the offer by the person to whom the offer is made. Finally, consideration is a benefit received, or something given up or exchanged, as agreed upon between the parties.
There is no requirement that a contract be in writing to exist. However, certain contracts must be in writing to be enforceable.
The time period for filing a lawsuit for an oral debt is shorter than the time period for filing a lawsuit for a written debt. In the case of an oral debt, a lawsuit must be filed within three years after the cause of action accrues. The limitation period begins to run at the time the loan is made. In the case of a written debt, the lender has six years after the cause of action accrues to file a lawsuit.
The above article is an excerpt from Arizona Laws 101: A Handbook for Non-Lawyers, 2nd Edition (Fenestra Books, 2012), by Donald A. Loose, republished with the author’s permission.
Disclaimer: Laws change constantly. Specific legal advice should be obtained regarding any legal matter. The information contained on this website does not constitute legal advice and no attorney-client relationship is created.
Donald A. Loose is an Arizona attorney, and the author of Arizona Laws 101: A Handbook for Non-Lawyers, and Estate Planning in Arizona: What You Need to Know. Mr. Loose is a regular guest on radio shows featuring local newsmaker interviews. He may be contacted at firstname.lastname@example.org.