Which contracts Missouri requires in writing

Most business deals are binding even if they are only spoken. But Missouri law (RSMo 432.010) says some deals must be in a writing signed by the person you want to hold to it. These deals include:

• A promise to pay someone else’s debt if they do not. This is called a guaranty.
• A contract to sell land or an interest in land.
• A lease for longer than one year.
• A deal that is not to be carried out within one year of the day it is made.

Sales of goods have their own rule under Missouri’s version of the Uniform Commercial Code. A contract to sell goods for $500 or more generally cannot be enforced without a writing. The writing must show that a deal was made and be signed by the person you want to hold to it. There are exceptions. But a business that counts on them is counting on a lawsuit.

The clauses that do the real work

Most of a contract covers the deal itself: price, scope and timing. The terms that decide who pays when things go wrong are usually near the end. Those are the ones the other side’s lawyer wrote most carefully.

• Payment and interest. If the contract names no rate, Missouri allows 9% a year on money owed under a written contract once it is due. If you want a different late rate, write it in.
• Ending the deal. Whether either side can end it at will, only for a good reason, or both. How much notice is needed, and what is owed at the end.
• Limits on liability. Caps on damages, and bans on claims for lost profits. Read these as if the worst has already happened.
• Indemnity. A promise to cover the other side’s losses from claims by outsiders, including legal costs. Check whether the promise runs both ways.
• Warranties and disclaimers. What the product or service is promised to do, and which promises the law would otherwise assume are waived.
• Assignment and change of control. Whether the contract survives if either company is sold. This matters if you ever plan to sell the business.
• Settling disputes. Which state’s law applies, which court hears a case, whether you give up a jury, and whether fights go to mediation or arbitration.
• Attorney’s fees. Whether the winner gets its legal fees paid. If you want that, the contract should say so clearly.

Using your own contract forms

Some businesses sign the same kind of contract again and again. Think of a customer service agreement, a purchase order, or a contractor agreement. You are better off with a form written for your business than one borrowed from another industry. Your form becomes the starting point in every deal, so the other side has to ask you for changes.

The firm writes forms around how your business really works. That means what you sell, how you bill, and which risks you can insure and which you cannot. Each form should come with a short staff guide that says which terms can be changed without a lawyer and which cannot.

How a contract review works

1. You send the draft and tell the office what the deal is meant to be.
2. Harjot Singh Padda, JD, reads the whole thing. That includes the exhibits and anything pulled in by reference, such as online terms.
3. You get a marked-up copy, called a redline, and a short memo ranking the issues. Some are worth walking away over. Some are worth negotiating. Some are fine as written.
4. Mr. Padda walks you through the memo. If you want, he handles the back-and-forth with the other side’s lawyer.

The goal is a signed contract you understand, not the longest possible markup.

When a signed contract is falling apart

Drafting and review happen before a dispute. The other side may stop paying, stop doing the work, or threaten to sue. Then the question becomes what you can do about it, and the firm’s breach of contract practice takes over. The terms above will then control what happens next: notice, time to fix a problem, limits on liability, and where the case is heard. That is why they deserve your attention now.

Common questions

Related reading

• Breach of contract
• Commercial leases
• Mediation and arbitration
• Business law practice