Important Promises Should Be Written

Promises, like pie crusts, are made to be broken.

Jonathan Swift knew that in 1738. It’s still true today. That’s why you should get important promises in writing. And be sure to write them completely, clearly and precisely--making it more likely they will be enforced in court.

A San Gabriel Valley woman’s troubles with a neighbor illustrate the problems of oral contracts and offer compelling reasons to avoid vague promises.

After heavy rains and winds last fall, the woman discovered she needed to replace the wall surrounding her home. She asked her neighbors to help pay for the wall.

She says one neighbor told her that he was willing to share the cost, but that at the time he was unable to afford his part, which was $1,280.

She says he said: “I’ll pay you later, when my situation improves.” That was about two years ago.

Several months ago, she was pleased to see that he was building a brick wall on the other side of his property. She figured that if he had the money to build another wall, he would soon pay her for the wall she had built. But when she asked him about it, she says, he pointed out that he had only promised to pay “when he could afford it,” and he said he still couldn’t afford it. He explained that the materials for his new wall had been given to him.

The reader’s first question is whether oral agreements are valid. That’s the easy part of her legal dilemma. Oral contracts are basically as valid as written contracts, except that certain contracts--such as those for the sale of land--must be in writing.

Difficult to Prove

The reason oral contracts should be avoided is that they are difficult to prove in court.

She also wants to know how long she has to sue on the oral contract. There is a different statute of limitations--the legal name for the time you have to sue--for oral and written contracts. Generally, and with some specific exceptions, the statute of limitations in California is two years for oral contracts and four years for written contracts. That means you have two years from the breach of an oral contract to sue to collect damages arising from the breach.

But there is another, more fundamental question that this reader must face if she tries to pursue her case in court. Is there an enforceable contract at all? The essential terms of a contract must be sufficiently clear and definite before a court will enforce it. Vague, uncertain contracts face judicial skepticism.

In this case, the neighbor promised to pay when he could afford it. Does this mean his only obligation is to pay when he himself feels that he has enough money to pay, which could mean never, or will a court impose an external “reasonable person” standard that requires him to pay when a judge thinks he reasonably can afford it?

It is difficult to accurately predict how a judge would react to this situation. All contracts have some degree of uncertainty, but if an essential term is too vague, the court will declare the contract void.

On the other hand, judges often look to the underlying intent of the parties.

Because this dispute involves less than $1,500, it could be resolved in small claims court, without the need for a lawyer.

The important future lesson of this case is not to accept vague, uncertain promises, even if they are in writing. It’s often difficult to do, but try to define promises in clear, precise terms. If you can’t collect payment now, set forth a specific payment plan, even if it’s only a minimum amount per month.