University Contract Law Report: Oral vs. Written Contract Comparison

This report provides a comparative analysis of oral and written contracts, delving into their definitions, enforceability, and practical applications. It begins by defining oral contracts as agreements established through spoken communication, referencing the Texaco Inc. v. Pennzoil Co. case to highlight their potential enforceability when properly established. The report then contrasts this with written contracts, which require a printed document and signatures from both parties for validity. A key focus is on enforceability, noting that while oral contracts are legally binding in the U.S., written contracts are generally preferred due to their clarity and evidentiary value, particularly in business contexts. The report outlines situations where written contracts are essential, such as real estate transactions or agreements exceeding a year. It also discusses relevant case law, including Johnson v. Hazaleus, Plante v. Fullerton, and One-O-One Enters., Inc. v. Caruso, to illustrate the legal principles governing contract enforcement and the importance of clear, unambiguous terms. The report concludes by emphasizing the advantages of written contracts in preventing misunderstandings and protecting parties involved in business agreements.

Running head: CONTRACT
CONTRACT
Name of the Student
Name of the University
Author Note

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MEMO
To: (To be filled in by the student)
From: (To be filled in by the student)
Date: 13th February, 2020.
RE: WRITTEN VERSUS ORAL CONTRACT
Oral Contract
An oral contract is considered to be a contract that has been established with the help of
spoken communication. Physical or written evidence may exist in relation to an oral evidence,
for instance, parties may write down that an agreement has been made by them, although the
particular contract is not written down. The case of Texaco Inc. v. Pennzoil Co., 729 S.W.2d 768
shall be considered to be a significant case in this regard (Butler et al., 2013). In this case, it was
stated that the enforcement in relation to oral contracts is possible, if such oral contracts are
established in a correct manner in the presence of witnesses.
Written Contract
A written contract is considered to be an agreement that is established with the help of a
printed manifestation or document. The signature of both the involved parties should be present
on the written document. The parties shall be bound by the contract after they put their signatures
on the deed of the contract (Pawlowski, 2018).
Enforceability
In the nation of the United States, verbal or oral contracts are considered to be binding in
the legal sense, however, the possibility or the likelihood exists that any particular party might

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fail to fulfill its obligation in relation to a particular contract that has been established in an oral
manner. Hence, written contracts are more preferred than the written contracts. If a particular
contract that has been established in an oral manner, misses any element relating to a valid
contract, then that particular contract shall be held to be void and such contract shall not be
enforceable (Wexler & Shashua, 2019). The rules in relation to written contract or an oral
contract may vary in the different states of the nation. Although, in certain cases a written
contract is essential. In the following situations, written contract is required:-
 When there is sale or transfer in relation to any particular interest regarding any kind of
reals estate or land.
 When the terms as provided in the contract shall last longer than the lifespan of anyone
involved party.
 When the values of the goods and commodities sold is higher than the amount of five
thousand dollars.
 In cases of agreements relating to divorce or marriage.
 When the terms in relation to the contract may take a time period of more than a year to
be carried out.
 When any particular contract includes a promise to make payment of a debt of any other
individual.
Many authors are of the view that an enforceable contract can also be made in a piece of
napkin as long as there is a clear description of the obligations of each party. However, oral
contracts are also enforceable but an oral can be denied any time by the parties but a written

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contract cannot be denied. The main advantage of a written contract is it helps to avoid future
misunderstandings or conflicts between the parties by creating the agreement flawless from the
beginning. Thus, a person in order to protect himself/herself can made the contract in writing
because it is easy to prove a written contract than an oral contract (Hemming & Daniel, 2018).
Business Contracts
Business contracts or the contracts that are given effect to by large business organizations
are established in written manner in most of the cases. The business organizations generally
prefer written contracts in order to avoid fraud, misrepresentation, misunderstandings and any
kind of other unwanted occurrences. In the business world, a written contract is considered to be
less risky in comparison to any oral contract as a document exists, which clearly and
unambiguously mentions the obligations and rights of the involved parties in the case of any
disagreement or misunderstanding (Seitz & Watzinger, 2017).
Relevant Cases
The case of Johnson v. Hazaleus, Okl., 338 P.2d 345 shall be considered to be a relevant
case in this regard. In this case, it was mentioned that prior to the enforcement of any particular
oral contract by a court, the proof in relation to the character and terms regarding the oral
contract must be cogent, unambiguous, clear, flawless, effective and forcible, and there should
not be any kind of rational doubt in relation to the character and terms of the contract.
The case of Plante v. Fullerton, 46 Okl. 11, 148 P. 87 shall be considered to be a
significant case in this regard. In this case, the evidence in relation to the oral contract was clear,
unambiguous, effective and forcible, and there was no sensible or rational doubt regarding the
oral contract.

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The case of One-O-One Enters., Inc. v. Caruso, 848 F.2d 1283, 1287 (D.C. Cir. 1988)
shall be considered to be an important case in this regard. In this case, the court stated that when
an involved party had the opportunity to read the conditions and terms of the written contract,
and when the signature of that involved party was not obtained through fraud or deception, then
in such a situation that party shall not be able to claim compensation on the grounds of fraud. In
this case, the enforceability of a written contract was discussed and confirmed.

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References
Butler, D., Christensen, S., Willmott, L., & Dixon, B. (2013). Contract Law Case Book.
Hemming, A., & Daniel, M. (2018). Halsbury's laws of Australia: contract GC I_II_V. Update of
contract GC I, II, and V.
Pawlowski, M. (2018). Wills-A binding contract. Trusts and Estates Law & Tax Journal, (195),
12-15.
Seitz, M., & Watzinger, M. (2017). Contract enforcement and R&D investment. Research
Policy, 46(1), 182-195.
Wexler, Y., & Shashua, A. (2019). U.S. Patent No. 10,291,949. Washington, DC: U.S. Patent
and Trademark Office.