A written document to memorialize terms of an agreement between two or more persons minimizes confusion and possibility of litigation. Even though an oral agreement is usually sufficient to form a legal binding contract, a written contract provides proof of the intentions of the parties.
To demonstrate a breach of contract, the aggrieved party must first show that a contract exists. An offer and acceptance is the starting point for a contract to exist. Since a written contract explicitly spells out the obligations of all the parties to the contract, a breach by one of the parties is easier to establish. Then under the terms of the contract, the aggrieved party must have performed its obligations while the other party did not. Finally, there must be damages resulting from the breach. A written contract also allows the parties to stipulate specific damages upon the occurrence of a breach of the contract.