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Is a Written Contract Necessary?

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In a lease contract, both parties agree on the written terms and conditions and both pledges to follow these written rules.

However, is a ”written contract” indeed necessary?

A lease contract is effective upon mutual consent even without any written instrument

Property management company A is about to sign a sublease contract on a parking lot of 10 spaces with one of their customers. It turns out that the landlord only holds the written agreement of 9 of the spaces.

One of the parking spaces was passed to the landlord with an oral contract.

This is referred to consensual agreement. In a lease contract, as long as both parties understand the terms and have mutual consent, nothing written is necessary. A written contract is used as evidence of the oral contract, but it is not required to make the certain terms and conditions effective.

Written contract to avoid conflicts and the increasing use of digital contract

However, having written evidence is crucial in avoiding possible conflicts. In the case where a tenant is having overdue rent, without any written form of evidence, it will be difficult for the landlord to collect the rent. In the situation where the dispute becomes a court case, written evidence will be needed.

Recently, digital contract is becoming more common. Besides printing out on paper, as long as the terms and conditions are stated clearly in words, it is countable as functional evidence.

Please be aware that a written document is needed for a ”fixed-term lease” to be effective.

 

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