However, it is bad business practice to make promises without putting that promise in writing. From the perspective of the party relying on the collateral, it may not legally be required that the collateral contract be in writing but it is highly recommended as there may be little legal recourse should the third party fail to live up to the terms of an oral contract.

There is tremendous inconsistency in this area of law, however, as evidence by the Wintersport v. Millionaire.com case. White was to receive benefit from his guarantee by virtue of his share ownership. Without his guarantee, Millionaire's second issue could not have been published. The company would earn no revenue without that guarantee, so White would have received benefit as the result of his guarantee. Yet the court ruled that this was not the case. That his guarantee was oral should not have mattered because the...
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