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Contracts

Do I need an attorney to draft a contract?

You can draft a legally binding contract without an attorney, so long as you ensure the contract memorializes the consideration exchanged (i.e. the rights or obligations that each party is giving up to the other) and all-important clauses and aspects of your agreement. However, if the transaction concerns subject matter that is or might become highly important to you, I would strongly suggest hiring an attorney to ensure your interests are best protected. Even if you believe a transaction is relatively simple, you may not think to include standard or specific provisions that could end up making a difference. Even if you copy language from another contract, you may not understand the verbiage without an attorney and do not want to make the error of creating a contract with so much “legalese” that it does not make sense to either or both of the parties, or to third parties including a court who may be trying to interpret the contract in the event of a dispute. In addition, the language you use may not comport with Nevada law. Thus, it is best to hire an attorney to ensure as little ambiguities as possible exist as to how each party is obligated to perform, on all applicable terms and conditions, and the remedies available should either side fail to perform.

Conversely, you may want an attorney to review a contract that another party has drafted before you sign it, to ensure you understand your rights and obligations in the transaction.

Are verbal agreements enforceable?

Although Nevada recognizes verbal agreements, with some exceptions, I would recommend putting any agreement in writing, even if you believe you can trust the other party to perform. I have heard countless stories where a person loaned money to a friend or family member without a written agreement, since they believed the other person would surely honor the verbal terms out of loyalty, only to have the borrower later completely deny any obligation to the lender and where the lender lacks any other evidence to prove a verbal agreement. Thus, better to be safe than sorry.  Putting your terms in writing also ensures the other party does not try to change any terms or claim you had a different understanding. Proving the original terms is much easier when you have a clear and concise contract memorializing them versus relying on outside circumstantial evidence to try to convince a court that certain terms existed.

In addition, Nevada has a longer statute of limitation for breach of a written contract (6 years) than of a verbal agreement (4 years), meaning you would have six years to sue someone after they fail to perform as promised under a written contract, but only four years to sue if you only had a verbal agreement.  The two extra years can make a big difference where people often forget about an obligation or become too busy with life events to want to try to pursue a debtor through the court system until time has already run out.