Recently, KUTV-Channel 2 News consulted with Attorney David S. Head regarding whether or not verbal agreements are binding in court.
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People often want to know if their verbal contracts are legal and binding because verbal agreements can be a tricky area of law. It’s always better to have a written contract, but in some instances, verbal agreements can be enforced.
Understanding What Constitutes a Verbal Agreement
An oral contract, also known as a verbal agreement, is an agreement that two individuals make by talking to one another. It’s like a “handshake deal” where the terms aren’t written down. You can use verbal agreements in a variety of different scenarios, such when you trust each other a lot, when you make simple trades, or when you make short-term deals.
Determining whether a verbal agreement is valid
A verbal agreement must meet certain requirements in order to be valid and enforceable. For example, usually one person or party makes an offer and another accepts that offer. In consideration of the offer the two parties will then give something to each other that has value such as goods, services or money.
There is typically an intention or an implied intention to create a legal agreement, but a contract may not actually be produced and signed. In the event a contract were to be created both parties would need to be of legal age and sound mind and able to sign the agreement. Another area to consider is certainty meaning the terms of the agreement need to be clear and understandable rather than open ended which can create uncertainty or make a decent deal unfair.
Proving that there was a verbal agreement
It’s often challenging to show that a verbal agreement exists because there is no written documentation. But there are ways to make your case stronger. You can offer proof like notes on the agreement, including the dates, times, and conversations, or call on any witnesses who may have been part of conversations involving the agreement.
Sometimes partial performance like having been paid for part but not all of the work you performed can establish that part of the agreement has been carried out, and it is still in effect. Written communications like texts, emails, or other written communications that refer to the verbal agreement can help demonstrate its existence.
Problems with Proving Oral Agreements
It might be challenging to prove verbal agreements, especially when there is a “he-said-she-said” situation. In certain cases, courts may look at witness testimony, facts, and how the parties acted to decide if there was an agreement and what it meant.
When you need a contract in writing
It’s usually best to use written contracts instead of spoken ones, especially when there are
Higher-Stakes Transactions: big quantities of money, valuable things, or important services and if there are more than one term, condition, or duty in a complex agreement.
Some kinds of contracts need to be in writing in order to be legally binding. These include:
Land contracts: agreements to buy, sell, or mortgage land.
Financial Agreements: loans, credit agreements, or other means to get money.
Deeds are legal documents that modify who owns something or other things.
It can be hard to show that verbal agreements are real and what they mean, but they can be real and enforceable. Written contracts are usually the best approach to avoid fights and make everything clear. If you’re not sure if a verbal agreement is real or can be enforced, it’s best to talk to a lawyer who specializes in contracts.
Take action
If you are experiencing an issue with a verbal agreement please reach out to us at Head Law and let us help you resolve your issue.