Why Written Contracts Are Legally Superior
It is obvious that a written contract is better than an oral one, simply because if an agreement is in writing, it will not be subject to the same interpretational difficulties as an oral contract, and its existence will be more easily provable.
But quite apart from the obvious, there are strong legal reasons for putting agreements, particularly in respect of land transactions, in writing.
BC’s Legal Requirements for Land Agreements
Section 59 of the B.C. Law and Equity Act, R.S.B.C. 1996, c.253 (the “Act”) imposes requirements on agreements regarding the disposition of land if such agreements are to be enforceable. (Note that the section does not cover dispositions of land by will or pursuant to a trust, nor does it cover leases for a term of three years or less.)
Pursuant to section 59, for an agreement relating to a disposition of land to be enforceable, it must satisfy any one of the following three requirements:
(a) the contract is in writing, signed by the party to be charged (the party who is not alleging the existence of the contract), and contains both an indication that an agreement has been made and a reasonable indication of its subject matter,
(b) the party to be charged has done an act, or acquiesced in an act of the party alleging the contract, that indicates that a contract has been made, or
(c) the person alleging the contract has, in reasonable reliance on it, so changed their position that an inequitable result, having regard to both parties’ interests, can be avoided only by enforcing the contract.
The Risks of Oral or Conduct-Based Contracts
The latter two requirements deal with contracts not in writing but rather created orally or by acts or conduct. Proving a contract formed in either of those ways is always going to be more difficult and time-consuming, riskier, and more expensive than if the contract in question is in writing.
What a Written Contract Must Include
That said, even a written contract may be found unenforceable if it does not set out the essential terms or if the absent essential terms cannot be established in some other way. So, for example, a contract for the sale of land should at a minimum accurately name the buyer and seller, identify the land (generally by either a civic or legal description), and state the selling price and the completion date.
Get Legal Advice Before Signing
It is always a good idea to obtain competent legal advice before entering into a contract involving land. If you have entered into such a contract, and a question has arisen about its enforceability, one of the lawyers at McKechnie & Company can assist you and advise you on how to address the issue.