Make sure your agreement is always in writing!

A bakery urgently needed a new commercial mixer. They called a retailer and agreed on the phone that the new mixer would be delivered and installed within two days. for a price of $2,000.

The retailer delivered the mixer a day late which meant the bakery missed out on one day’s revenue.  When the bakery received the invoice, they were surprised to see an installation charge of $200 which they thought was factored into the price given to them over the phone.

This is an example of things that can go wrong when an agreement is not in writing.  The bakery could engage a lawyer to recover the lost revenue and dispute the installation fee.  However, a lawyer’s reasonable fees for the necessary work may exceed the sum they are trying to recover from the retailer.

A written record of what was agreed to between the bakery and retailer would have quickly established whether there was any clear breach of the contract by either of the parties.  

Without such written record, it is hard to prove what was agreed.  This increases the time and costs associated with resolving the dispute.

Some important terms which should be recorded are:

• The agreed price;
• The parties to the agreement;
• A description of the goods or services to be provided;
• The date of delivery of goods or completion of services;
• The due date for payment; and
• The procedure for a breach of the agreement.

While verbal agreements are valid contracts, it pays to record all agreements in writing, to avoid lengthy disputes and high legal fees if a complication or dispute arises.

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