Written agreements provide clarity and certainty. Verbal agreements are often not accurate as memories fade, one party’s version may be different from the other’s and, as time lapses, circumstances change, and parties’ intentions can change too.
When the terms of what has been agreed fail to be recorded in writing, this opens the door for dispute. Consider this: you have been engaged by a business to perform work for it. In the absence of a written agreement, a key question is whether you have been hired as an employee or a contractor (or something else). Amongst other things each of these relationships have significantly different legal, tax and financial implications both for you and the business.
When a dispute arises and there is significant disagreement between the parties, parties often resort to litigation which is costly and time consuming. Instead, have a written agreement which defines what has been agreed and that legally proves the agreement and its terms.
Written agreements provide protection for the parties, so they are aware of the capacity in which they enter the agreement, the obligations imposed on them and their rights and entitlements. Written agreements are usually enforceable unless there are factors which nullify or invalidate them.
A written agreement, however, cannot ‘make’ someone an independent contractor, for example. Nevertheless, a written agreement can still serve as important documentation to support employee or contractor status.
Even with a written agreement in place, a court can still look behind the document to define the true relationship between the parties. The terms of the written agreement, however, serve as evidence for a court to assess in any litigation. That is, the written terms give guidance to a court and limit ambiguity if terms have been drafted validly and clearly.
The benefits of a detailed, clear, and well written agreement are many. It should always be a basic principle and best business practice to enter into written agreements with parties you intend to have dealings with – whether they be contractors, employees, customers, suppliers, partners, shareholders or even investors.
Our Commercial & Dispute Resolution lawyers are highly experienced and can provide advice on matters pertaining to agreements you may need reviewed and refreshed or have prepared from scratch.
Please don’t hesitate to contact us for assistance on +61 3 9822 8588 or email HERE to find out how we can help you.
