Informal contracts are still binding — even if written on a cocktail napkin

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By Amy E. Feldman, Judge Technology Solutions
PHILADELPHIA (KYW Newsradio) — If you wish you could take back what you did at the bar, one woman has your poor choice beat. 

A jury in Alaska ordered the buyer of a news website to pay more than $850,000 for failing to pay on the remainder of a contract.  And by "contract," I mean the promise she scrawled on a cocktail napkin, in which she offered to pay $100,000 a year for 10 years to buy the Alaska Dispatch from the owner.  

She stopped paying, so he sued and won. Now wait — promises made in a bar are legally enforceable? 

Well, not the one where you promised to make her the happiest woman on Earth. But if you make an agreement with someone to do something in exchange for something else — like, if you sell me X, I'll pay you Y, and all parties understand the deal and agree on all the terms — you've created a binding contract.

It is binding whether you write it on parchment paper with a quill and ink, in a Word document that you print out and sign, or on a cocktail napkin. 

Maybe next time, leave the pen and promises at home until you think through all the consequences in the light of day. 

Really, that's good advice anytime you go into a bar.