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Do contracts need to be
in writing?
Yes. All agreements should
be in writing, no matter how minor they seem, to ensure
that each party understands what they are agreeing to and
to document this fact. Under Alaska Law AS 45.02.201 (seeThe
Current Alaska Statutes)
governing commercial transactions, the sale of goods valued
at more than $500 must be in writing. Contracts can be
made verbally by speaking the intent of both parties; however,
verbal contracts are more difficult to enforce in the courts.
The fact that an agreement was not put in writing is not
proof that a contract was not made. We recommend not relying
on spoken agreements since they may later be remembered
differently by each party.
Does an attorney have to
write the contract?
No. In some cases involving
simple transactions such as a rental agreement or simple
time purchase agreement it is not necessary to have an
attorney write the agreement. It is, however, a good idea
to have an attorney prepare contracts that cover complicated
transactions.
A contract is a legal document
that commits each party to perform under the terms spelled
out in the agreement. For this reason, it is very important
that each party to the agreement knows and understands
what is being agreed to. If you don't understand the terms
of a contract, don't sign it until it is made clear. It
is also a good idea to have an attorney periodically review
standard contracts like purchase orders or equipment leases
that are routinely used in municipal operations to ensure
they are up to date with any contract provisions that may
have come into effect after the contract was drafted.
If the other party to a
contract fails to perform or breaks the contract, how
long does a municipality have to sue?
Under AS 09.10.053, if someone
does not perform under a contract it is called a "breach
of contract". A person generally has three years from
the date of the breach of the contract to sue for any damages
that may have occurred. However, under AS 09.10.120 (see The
Current Alaska Statutes),
municipalities generally have six years to bring an action
for a breach of a contract.
This special law may not apply
to all contracts, so review the contract carefully and/or
talk with an attorney about the particular contract that
is being broken.
Can one party force the
other party to perform under the contract?
Going to court to force the
other party to perform is called "suing for specific
performance". Frequently, the courts will not enforce
specific performance because it is messy and can continue
the problem. Rather than enforce the performance of the
contract, courts may require one party to pay another for
their damage. "Awarding damages" requires the
payment of cash to the party who has not breached the contract
for any inconvenience caused by the breach. In cases where
there is no money available to award, or there is collateral
involved such as a real property contract, the court is
more likely to enforce specific performance. Once a breach
has occurred it is advisable to contact an attorney, particularly
if the contract is complicated or involves large sums of
money.
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