Most of the time, when people reach an agreement, they aren’t required to have a written contract. The oral agreement is enough. That’s why, for example, buying something small over the counter is enforceable without a receipt. On the other hand, every state has a statute (the “statute of frauds”) that requires certain categories of contracts to be written and signed to be enforceable. The most common contracts of this type are contracts involving the sale of land, which is why offers to buy and sell land are written in earnest money agreements and why deeds are used to complete the sale.
Usually, when there is a dispute over a contract covered by the statute of frauds, one of the parties will pull out the paperwork, and everyone reads it. If there are disputes about the terms, it’s usually about interpreting a confusing provision or a claim that there was an agreement to modify the contract. Occasionally, someone claims the contract was altered after signing. Sometimes, however, there is a problem: the contract is lost, and nobody has a copy. What are people supposed to do then?
Generally speaking, the courts are relatively lenient. Statutes of frauds are generally written to say that the writing is needed to make the contract good, but they don’t say anything about how to prove the contract. The courts recognize that sometimes documents are lost. As a result, if the contract is lost, the courts will allow testimony describing the contents and confirming that any required signatures were present.
In Oregon, the case that established the concept involved a prenuptual agreement. After the wife died, her daughter sued the husband to enforce a provision in the agreement to make a will for the daughter’s benefit. She claimed the husband had destroyed the agreement. When the husband filed a pretrial motion denying the contract, she filed an affidavit from the minister that included:
“My church the Presbyterian Chuch [sic ] USA requires marriage counseling prior to the union so I met with them on Friday the 6th of November in her living room. In golden age marriages one [of] the important matters of discussion is always prenuptial agreements. In this case Vernita being forward produced and allowed me to read her document that was signed by both of them. It was what I call very severe.”
The court denied the motion and ordered a trial, noting that it wouldn’t allow the statute of frauds to be used to commit a fraud.
In Washington, the leading case involved a loan to a business that one of the investors signed a guarantee for. The business failed, and the lender asked for his money back. Unfortunately, the promissory note with the guarantee was lost. The investor argued that guarantees were covered by the statute of frauds, and no writing was shown. The court ruled that the lender had proven that there had been a writing, but it was lost, and ruled for the lender.
It’s usually safest to keep copies of important documents in case one gets lost. If, however, you do lose the original, you’re not necessarily out of luck. Another party to a contract may have a copy. If that isn’t the case, you may be able to prove there was a contract by testifying, particularly if you kept notes of the deal leading up to the signing. If you’re in a situation like this, talk to a lawyer to get an opinion whether a judge or jury is likely to be convinced by what you can put together.