Utah Contractor Practice Exam

Which of the following is required for a valid contract in construction?

1. A written agreement

2. Oral agreement

3. Averbal handshake

4. Letter of intent

The correct answer is: A written agreement

For a contract in construction to be valid, it is essential to have a written agreement. A written contract provides clarity and serves as a formal record of the parties' intentions and agreements, detailing the rights and responsibilities of all involved. It reduces misunderstandings and disputes by outlining the scope of work, terms of payment, project timelines, and any specific conditions that apply. While oral agreements and informal actions such as a verbal handshake or letters of intent can sometimes initiate discussions or express intent to engage in a contract, they lack the formal qualities required for enforceability in many legal contexts, particularly in construction. For significant projects, having a written contract ensures that all details are explicitly stated and agreed upon, which is crucial in the often complex and regulated field of construction.