1. Putting it in writing legally makes good sense because it can prevent a costly oversight, which often occurs in verbal contracts.

Obviously, a person cannot remember everything, and despite the best of intentions, relying completely on our memory is a sure way to forget some obligations or even have doubts as to whether the other party fulfilled them.

For many people, the term 'Contract' is viewed as a complex document of legal technicalities.

In the United States in 1998 the State of New York passed a law requiring contracts to be written in a non-technical language.

The New York Times commented: "Suspicion also is high that lawyers favour incomprehensible language to make sure a lawyer must be hired to translate". Despite the lofty arguments by lawyers regarding the need for such strained and difficult language, the vast majority of legal jargon is absolutely unnecessary.

Clarity, simplicity, and readability should be the goal in legal documents.

In most cases, a contract does not have to be written in words only a solicitor can decipher. Almost all books pertaining to law explain that a contract is merely 'a mutual agreement between two parties with either party having the right to demand its performance'.

In accordance with the law, for a contract to be legal and binding it must contain the following four elements:

(a) There must be an offer and an acceptance with a definite agreement between the parties. In simple terms, one party must make a clear offer, and the other party must accept it.

(b) A consideration must be involved. The party making a promise must receive a benefit and the party accepting the promise something of detriment. The consideration must be something of value in the eyes of the law.

(c) Both parties must be legally competent to enter into the contract. For example, any person who is under the legal age, physically or mentally incapacitated, and/or a drunkard is excluded by law.

(d) The subject matter of the contract must be legal. For example, a gambling agreement would be considered illegal.

Hidden legal traps in the business world.

The legal system has a profound effect on the operation of every business, from the giant multinational corporation to the one-person enterprise. While large corporations are able to obtain and pay for expensive legal representation, most small businesses find it difficult to afford such a course of action.

Whether it is in the form of signing a lease for office space, obtaining a contract for work, or accepting a shipment of goods, the small businessperson must deal with a variety of legal documents nearly every business day, usually without the aid of a solicitor.

Unfortunately, many business people who are confronted with such forms do not understand the legal ramifications of the use of these forms. They simply sign the lease, or contract, or bill of sale with the expectation that it is a fairly standard document, without any unusual legal provisions. They trust that the details of the particular document will fall within what is generally accepted within the industry or trade.

In most cases, this may be true. In many situations, however, it is not. In most countries, the court systems are clogged with cases in which two businesses are battling over what was really intended by the incomprehensible legal language in a certain contract.

Much of the confusion over business legal contracts comes from two areas: First, there is a general lack of understanding among many in business regarding the framework of contract law. Second, many contracts are written in antiquated legal jargon that is difficult for even most solicitors to understand, and nearly impossible for a lay person to comprehend.

Sometimes a party is mistaken about certain aspects of a contract and would not have entered into it had they appreciated the true situation. Most commonly the mistake is no more than a failure to estimate correctly the value of the goods or services to the overall operation.

If the true situation had been realised the contract would not have been entered into or would not have been agreed upon at a lower price. But the law is not concerned with errors of judgment. If you make a bad bargain you have only yourself to blame.