In Minnesota, if you are looking to enforce an unsigned contract, you may have significant obstacles to enforcing such an agreement. Generally speaking, I would conclude that an unsigned written contract (whether it is a partnership agreement, an employment contract, a subcontractor agreement, a buy-sell agreement or a lease) is unenforceable under the law. However, this is NOT a hard and fast rule. In every case, there are certain exceptions.
What are reasons that an unsigned contract might be enforceable?
1 – All of the parties to the contract have performed substantially in accordance with the terms of the unsigned contract (in other words, for some period of time, the parties’ actions indicated that indeed there was a contract and that the unsigned contract operated reflected the terms of that contract).
2 – At least one of the parties to the contract has performed substantially in accordance with the terms of the unsigned contract (in some cases, even if only one party’s actions indicate that indeed there was a contract, there is a possibility that a contract still existed and that the terms of the unsigned contract accurately reflect the terms of that agreement.)
3 – There was an offer, acceptance, and consideration exchanged. These are the basic requirements of any contract, verbal or written.
What is the biggest challenge to enforcing an unsigned contract?
In Minnesota, the fact that the contract was not signed can significantly hurt the ability for that contract to be enforceable. The parties merely have a verbal contract at best without a signed written contract. Without a signed written contract, there is always the possibility that one or more of the parties will (a) deny the existence of any contract or (b) deny that the terms of the unsigned written contract are accurate. It then becomes a question of fact and in a courtroom it can be very difficult for the party trying to demonstrate the existence of a contract to prove it.
What should I do if I have an unsigned contract?
If you have contracted with someone and the two of you have an unsigned written contract, as soon as possible, make sure to have that contract signed (and dated) by both parties. Remember, if one party signs the contract but not the other party, it is as though the contract is unsigned. Also, the contract needs all parties to sign in order to be considered enforceable as a written contract. One other recommendation, if you have an unsigned written contract, it is usually a good idea to have an attorney review that contract before signing just to make sure the terms are in order.
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