Colorado law- unsigned contracts

Posted by: Aug 22, 2017By Brian Stutheit

We often have clients who tell us something like, “I signed the contract, but I did not get a copy signed by the other guy.”  Is there a contract in that situation?  What is Colorado law about unsigned contracts?

Even without a signed writing between the parties, and enforceable contract may exist.  Colorado common law principles allow for the formation of a contract without the signatures of the parties who must honor the contract.  In the case of E-21 Engineering, Inc. v. Steve Stock & Associates, Inc., the Colorado Court of Appeals enforced an unsigned contract supplied by a general contractor.  E-21 sent Stock a letter of intent indicating that it intended to enter into a formal subcontract with Stock for the performance of certain aspects of the work on a construction project.  E-21 sent Stock a subcontract, which includes a provision for mandatory arbitration. Neither party ever signed the subcontract.  Nonetheless, Stock began preliminary work.  E-21 wrote Stock a letter in which it rescinded the letter of intent and stated that ” no executed subcontract exists between our two firms, [and] therefore there is nothing to cancel.” Stock sued for breach of contract. The Court of Appeals ordered the trial court to determine if the parties had agreed to a contract, despite the absence of a signed document.  “We therefore conclude that the lack of signature in and of itself does not invalidate an otherwise enforceable agreement.”

This law is not limited to construction cases.  It would apply to employment contracts, or other business agreements.

Further, an unsigned writing does not need to be precise or detailed to become a contract.  A general letter of intent, or a memo expressing the outline of contract terms, can become a contract.  The court will supply missing terms by custom in the industry, or inferring what was intended.

A danger in beginning work based on a proposal, without a detailed written contract,  is that by commencing performance, the court may find that you accepted the terms proposed from the other side.  Or, the court could imply terms which you never wanted into the proposed contract.