By Milan Chatterjee | Founding Attorney, Milan Legal |
Nevada contract requirements override what your document says in more places than most business owners expect. An agreement can be unenforceable because it was never put in the form Nevada requires. A clause can be rewritten by a court rather than struck. And an indemnity or forum clause can fail for reasons that have nothing to do with whether it was fair, and everything to do with how it was written and where it was placed.
This guide covers the Nevada contract requirements that apply to your agreement whether or not anyone considered them: what has to be in writing, how long you have to sue, the clauses that decide outcomes when a dispute arrives, and the two rules on arbitration and electronic signatures that catch out template users most often.
Nevada Contract Requirements: What Has to Be in Writing
Most Nevada contracts do not need to be written to be binding. A defined list does, and an agreement in that list is void without a signed writing no matter how clearly both sides understood it.
NRS 111.220 makes the following void unless in writing and signed:
- Every agreement that, by its terms, is not to be performed within one year from the making of it.
- Every special promise to answer for the debt, default or miscarriage of another.
- Every promise or undertaking made upon consideration of marriage, except mutual promises to marry.
- Every promise or commitment to loan money or to grant or extend credit in an original principal amount of at least $100,000, made by a person engaged in the business of lending money or extending credit.
- Every promise or commitment to pay for obtaining a loan or an extension of credit for another person, where the amount is $1,000 or more.
The first item is the one that bites. A two-year service arrangement agreed on a call and documented by nothing more than emails about scope may sit outside the statute, and the party trying to enforce it is the one who finds out.
Goods are on a separate rule
NRS 104.2201, Nevada’s version of the Uniform Commercial Code provision, provides that a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is a record.
Three exceptions in subsection 3 matter in practice: specially manufactured goods unsuitable for resale where the seller has made a substantial beginning; a contract the defending party admits to in a pleading or in court, for the quantity admitted; and goods for which payment has been made and accepted, or which have been received and accepted.
That last exception is why partial performance changes the analysis. Once goods have gone out and money has come in, the absence of a signed document stops being decisive.
How Long You Have Depends on Whether It Was Written
Nevada gives a written contract half again as long as an oral one, which is the strongest practical argument for putting an agreement on paper even where the law does not require it.
| Type of agreement | Limitation period | Statute |
|---|---|---|
| Contract, obligation or liability founded upon an instrument in writing | 6 years | NRS 11.190(1)(b) |
| Contract, obligation or liability not founded upon an instrument in writing | 4 years | NRS 11.190(2)(c) |
Two years of difference sounds academic until a slow payment dispute is in its fifth year, which is not unusual where the relationship continued after the breach and both sides kept expecting it to resolve.
The Clauses That Decide Who Wins
When a commercial dispute is fought, it is usually fought over four or five provisions that nobody discussed during the negotiation. Nevada has decided authority on three of them, and all three turn on drafting rather than on fairness.
Liquidated damages: valid until the other side proves otherwise
Nevada treats a liquidated damages provision as prima facie valid. In Mason v. Fakhimi (1993) the Nevada Supreme Court confirmed that the party challenging such a clause carries the burden, and must establish that the stipulated sum amounts to a penalty because it is disproportionate to the actual damages sustained.
The practical effect favors whoever drafted the clause. A challenger has to put actual damages in evidence and show the gap, which is harder than simply calling the figure excessive. The corollary is that a figure with no relationship to any foreseeable loss is the one that fails.
Indemnity: silence means you are not covered for your own negligence
This is the provision most often misread by non-lawyers, because the broad language reads as though it covers everything.
In Reyburn Lawn & Landscape Designers v. Plaster Development Co. (2011) the Nevada Supreme Court held that an express or explicit reference to the indemnitee’s own negligence is required before the clause reaches that negligence. A general provision indemnifying against “any and all claims”, standing alone, is not sufficient. The court also rejected the argument that excluding only the indemnitee’s sole negligence implies coverage for its contributory negligence.
So a party relying on a sweeping indemnity to cover its own partial fault is relying on language Nevada reads narrowly. Whether you want that outcome depends entirely on which side of the clause you are on, which is the reason it is worth reading before signature rather than after.
Forum selection: it can fail on placement alone
Tandy Computer Leasing v. Terina’s Pizza (1989) is the most instructive Nevada contract case for anyone drafting. The Nevada Supreme Court declined to enforce a forum selection clause, and the reasons were almost entirely about how the clause appeared in the document:
- it had not been negotiated between the parties;
- neither the lessor’s agent nor the lessees knew it was there;
- it was in fine print on the back page under the heading “MISCELLANEOUS”; and
- there was no notice of it on the front page, where the signatures were.
Every element of the transaction had taken place in Nevada, and the court held that enforcing the clause would be unreasonable and unjust.
The drafting lesson is direct. A forum or venue provision that matters should be visible, referenced near the signature block, and capable of being described as negotiated. Burying it improves nothing and is the specific fact pattern a Nevada court has already refused to enforce.
Restrictive Covenants Nevada Will Not Enforce
Two provisions of NRS 613.195 are drafting problems rather than employment law questions, which is why they belong here.
The first is an outright exclusion. A noncompetition covenant may not apply to an employee who is paid solely on an hourly wage basis, exclusive of any tips or gratuities. That is not a factor to weigh. In a Las Vegas workforce where a large share of staff are hourly and tipped, it voids a clause many employers believe they hold.
The second is that a Nevada court will rewrite rather than strike. Where a covenant contains limitations that are unreasonable or impose a greater restraint than necessary, the court shall revise the covenant to the extent necessary and enforce it as revised. That cuts both ways: an overbroad clause will not necessarily fail outright, and a carefully calibrated one earns no credit for its restraint.
NRS 613.195 also protects a former client who chose to leave and seek out the employee without being solicited, and attaches a consequence where an employer tries to enforce a covenant it should not. The employee-side detail sits with Nevada employee rights and the deadlines attached to them.
Getting the Agreement Right Before It Is Signed
Every issue above is settled by statute or by a court after the fact, and none of them are negotiable at that point. All of them are decidable in advance, while the wording is still yours to choose.
The Arbitration Rule That Is Still in the Statute Books
NRS 597.995 is the most misleading provision in Nevada contract law, because it reads as good law and generally is not.
The statute requires that an agreement which includes a provision requiring arbitration must include specific authorization for that provision, indicating that the person has affirmatively agreed to it. On its face that means an arbitration clause needs separate assent, typically initials beside the clause.
In MMAWC, LLC v. Zion Wood Obi Wan Trust (2019) the Nevada Supreme Court held that the Federal Arbitration Act preempts NRS 597.995. Because the FAA makes written arbitration provisions valid, irrevocable and enforceable, a state may not invalidate them under a rule that applies only to arbitration provisions.
The position is that the statute remains printed in NRS Chapter 597 while being unenforceable across the large category of contracts the FAA reaches. Two opposite mistakes follow. A party relying on the statute to escape an arbitration clause it agreed to is relying on preempted law. A drafter ignoring the specific authorization requirement entirely is making an assumption about FAA coverage that is safe in most commercial contracts and not universally so.
Electronic Signatures Work, With One Condition
NRS 719.240 provides that a record or signature may not be denied legal effect or enforceability solely because it is in electronic form, and that where a law requires a signature, an electronic signature satisfies the law.
The condition is in NRS 719.220: the chapter applies only to transactions between parties each of whom has agreed to conduct transactions by electronic means. That agreement is determined from the context and surrounding circumstances, including the parties’ conduct.
Between businesses that have always exchanged documents by email, the agreement is easy to establish from conduct alone. It becomes an argument in a one-off transaction with a counterparty who dealt on paper throughout and then received a single signature request by link. One sentence recording that both parties consent to electronic execution removes the question.
What a Template Cannot Know
A straight answer, because most people reading this are weighing an attorney against a document they can download in a minute.
A template is a reasonable starting point for a low-value, short-term, single-jurisdiction arrangement between parties of similar sophistication. Saying otherwise would be an overstatement.
What a template cannot do is any of the following, each of which is a Nevada-specific point from the sections above:
- Recognize that the covenant it contains is void because the employee is paid hourly.
- Know whether the arrangement falls inside NRS 111.220, which decides whether the agreement exists at all rather than what it says.
- Tell you that its indemnity language will not reach your own negligence in Nevada without an explicit reference to it.
- Put the forum clause somewhere a Nevada court will enforce it, rather than under a heading on the back page.
- Account for the four-year limitation period applying to whatever part of the deal was agreed orally alongside the document.
The general rule is that the more the counterparty’s document has been drafted for the counterparty, the less a template of your own protects you. Signing the other side’s paper is where the real exposure usually sits, and reviewing it is a narrower exercise than drafting from scratch.
Where a Nevada Contract Dispute Gets Heard
In Clark County, EDCR 1.61 assigns matters to the Business Court where the primary claims arise under NRS Chapters 78 to 92A, along with Uniform Commercial Code claims, business tort claims and claims involving the purchase or sale of stock, assets or commercial real estate. A commercial contract dispute involving goods therefore has a route onto a specialist docket.
In Washoe County, WDCR 2.1 establishes a Business Court Docket, but the mechanism differs: a party requests assignment and the presiding judge decides whether to accept it, and several categories are excluded outright.
This matters while the contract is being drafted rather than afterwards, because the venue and dispute resolution clause is written at the same time, and Tandy decides whether it survives.
Contracts for Las Vegas and Clark County Businesses
Clark County’s hospitality, construction and professional services base produces two recurring problems. The first is restrictive covenants that cannot survive NRS 613.195, because so much of the workforce is hourly and tipped and the exclusion is absolute. The second is scope disputes in service arrangements that were discussed at length and documented thinly, which then meet the one-year rule in NRS 111.220 and the four-year period in NRS 11.190(2)(c) at the same time.
Construction and development work in the county also makes Reyburn Lawn directly relevant, since it arose from an indemnity clause between a general contractor and a subcontractor in a construction defect action.
Contracts for Reno and Washoe County Businesses
Northern Nevada’s logistics, manufacturing and distribution activity puts a higher proportion of agreements under NRS 104.2201, where the $500 threshold and the partial performance exception do most of the work. Supply arrangements that run for years on purchase orders and invoices rather than a master agreement are common, and they are exactly the arrangements where identifying what the contract consists of becomes the first question in a dispute.
Milan Legal Perspective
Before founding Milan Legal, Milan Chatterjee served as Associate Compliance Counsel at Las Vegas Sands Corporation, a Fortune 500 hospitality company, advising senior leadership on compliance, governance and risk across global operations. A UCLA School of Law graduate admitted in Nevada (Bar No. 15159) and California, he was appointed to the Nevada Supreme Court Access to Justice Commission and serves as Founding President of the South Asian Bar Association of Las Vegas.
Milan Legal works with individuals, families and business owners across Las Vegas, Clark County, Reno, Washoe County and the Lake Tahoe region.
Frequently Asked Questions
Most contracts do not have to be written. NRS 111.220 makes a defined list void unless in writing and signed, including any agreement not to be performed within one year, a promise to answer for another’s debt, and a commitment to lend at least $100,000 by someone in the business of lending. Separately, NRS 104.2201 requires a record for a sale of goods priced at $500 or more.
Six years for a contract, obligation or liability founded upon an instrument in writing, under NRS 11.190(1)(b). Four years where it is not founded upon a writing, under NRS 11.190(2)(c).
Not on its own. In Reyburn Lawn & Landscape Designers v. Plaster Development Co. (2011) the Nevada Supreme Court held that an express or explicit reference to the indemnitee’s own negligence is required, and that a general provision indemnifying against “any and all claims” standing alone is not sufficient.
Generally yes. Nevada treats such a provision as prima facie valid, and under Mason v. Fakhimi (1993) the party challenging it bears the burden of establishing that it amounts to a penalty because the stipulated sum is disproportionate to the actual damages sustained.
Yes, and it can fail on presentation alone. In Tandy Computer Leasing v. Terina’s Pizza (1989) the Nevada Supreme Court declined to enforce a clause that had not been negotiated, was in fine print on the back page under “MISCELLANEOUS”, and carried no notice on the front page where the signatures were, in a transaction that took place entirely in Nevada.
Sometimes, and never against certain employees. Under NRS 613.195 a covenant may not apply at all to an employee paid solely on an hourly wage basis, exclusive of tips or gratuities. Where a covenant is overbroad, the court shall revise it to the extent necessary and enforce it as revised rather than striking it.
NRS 597.995 says an agreement containing an arbitration provision must include specific authorization for it, but in MMAWC, LLC v. Zion Wood Obi Wan Trust (2019) the Nevada Supreme Court held the Federal Arbitration Act preempts that statute. The provision remains in the statute books while being unenforceable in the contracts the FAA reaches.
Yes. NRS 719.240 provides that a record or signature may not be denied legal effect solely because it is electronic, and that an electronic signature satisfies a law requiring a signature. NRS 719.220 limits the chapter to transactions between parties who have each agreed to conduct business electronically, determined from context and conduct.
Conclusion
The Nevada contract requirements that decide a dispute are mostly not in the contract. NRS 111.220 decides whether some agreements exist at all. NRS 104.2201 does the same for goods at $500 and up, with partial performance changing the answer. NRS 11.190 gives a written agreement six years and an oral one four. NRS 613.195 voids restrictive covenants against hourly employees and directs courts to rewrite rather than strike. NRS 597.995 remains on the books and preempted. NRS 719 makes electronic signatures effective on a condition worth writing down.
Three decided cases then do the rest of the work. Mason puts the burden on whoever attacks a liquidated damages figure. Reyburn Lawn means an indemnity clause reaches your own negligence only if it says so. Tandy means a forum clause can fail because of where it sits on the page.
All of that is decidable while the document is being written, and none of it is negotiable once a dispute has started.
Before You Sign, Make Sure You Understand What You Are Agreeing To
The highest-risk document is usually the one drafted by the other side. Reviewing it before signature is a narrower exercise than drafting from scratch, and it is where most of the exposure in a commercial relationship actually sits.
