You may have wondered whether your verbal contract will be considered valid in court. Oral contracts can be considered binding and enforceable in court. However, for many reasons—including issues related to evidence and applicable statutes of limitations (a statute of limitations is the amount of time one has to file a lawsuit)—you should have your contracts in writing.
In Utah, a written contract has a statute of limitations for six (6) years, but only four (4) years for an oral contract. See Utah Code §§ 78B-2-307 & 78B-2-309. Therefore, if you have a written contract, you have two (2) more years to file a lawsuit than you do for an oral contract. Generally, oral contracts are also more difficult to prove an agreement was made, and that the opposing party breached it, than a written contract.
Furthermore, there are many defenses that an opposing party can utilize to dismiss your breach of oral contract claim—that would not otherwise be available if the contract were in writing. For example, there is a law called the Statute of Frauds that requires that certain types of agreements be in writing in order to be enforceable in court. Such agreements include, but are not limited to, those transferring or selling land, agreements that will not be performed within one year from the entry of the agreement, credit agreements, an agreement to assume another’s debt or obligation, or contracts for the sale of goods of $500 or greater. See Utah Code §§ 25-5-1, 25-5-3, 25-5-4, and 70A-2-201.
While it is best to have your agreements and contracts in writing, there may be other legal claims available that may apply to your situation even if the Court finds that your oral contract is not legally enforceable.
At Head Law, we have many years of experience litigating breach of contract and other legal disputes, and we will fight to protect you and your family’s rights. If you have a possible breach of contract or other legal claim, and are unsure what your options are, we are more than happy to talk with you about your current legal issues.