In Canadian law, both written and verbal contracts are considered legally binding agreements between two or more parties. However, there are significant differences between the two types of contracts that can impact their validity and enforceability in court.
Written contracts provide a clear record of the terms and conditions agreed upon by the parties involved. They are typically more formal in nature and require signatures from all parties to indicate agreement and acceptance of the terms. A written contract can also include additional clauses, such as specific conditions for termination or dispute resolution methods, to provide added protection for all parties involved.
Verbal agreements, on the other hand, are often less formal and may not be recorded or documented in any way. These types of agreements can be made through a phone call, email, or in-person conversation. While verbal agreements are legally binding, they can be much more difficult to enforce in court, given the lack of a written record or evidence.
One significant difference between written and verbal contracts is the statute of limitations for enforcing the agreement in court. In Canada, the limitation period for written contracts is generally two years from the date of breach, whereas the limitation period for verbal contracts is only six years. This means that if a party wishes to take legal action to enforce a verbal agreement, they must do so within a shorter period of time compared to a written agreement.
Additionally, the burden of proof in court is much higher for verbal contracts. Since there is no written record of the agreement, the parties involved may need to rely on witnesses or other forms of evidence to prove the existence and terms of the agreement. This can be challenging and may result in a more drawn-out legal process.
In conclusion, while both written and verbal contracts are legally binding in Canadian law, written contracts offer more protection and clarity for all parties involved. They provide a clear record of the terms and conditions agreed upon, which can reduce the likelihood of misunderstandings and disputes arising. Verbal agreements can be more challenging to enforce and may require additional evidence to prove their existence and terms. As such, it is always advisable to use written contracts in any situation where a binding agreement is necessary.