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.
Related Content
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 don@looselawgroup.com.
Arizona’s New COVID Laws
/in Business Law, Lawsuits & Litigation/by Don LooseAs COVID-19 cases continue to rise in Arizona, according to data compiled by state health officials, state lawmakers have enacted two new laws aimed at restricting responses to the malicious and malingering coronavirus.
Homeowners’ Rights in Planned Communities: The Grass Isn’t Always Greener
/in Business Law/by Don LooseThe new artificial grass law, which will take effect 91 days after the current legislative session ends (on or around June 24, 2022), will be added to this list of homeowners’ rights.
Oral Contracts and Their Enforceability in Arizona
/in Business Law/by Don LooseWhile different rules apply to proving each, one type of contract is not necessarily more enforceable than the other.
When are Written Contracts Required in Arizona?
/in Business Law/by Don LooseThe Arizona State Legislature, to prevent fraud, enacted a law requiring that certain promises or agreements be in writing. An action brought on an oral agreement in violation of the Statute of Frauds will be dismissed by the court.
Interest Rates as Established by Private Contract or by Law
/in Business Law/by Don LooseIn Arizona, interest on any loan, indebtedness, or other obligation will be at the rate of 10% per annum, unless a different rate is contracted for in writing.