Is A Verbal Agreement Legally Binding?

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To be legally binding, a verbal agreement or oral contract must be equitable, reasonable and created with the intention of honoring it. Typically, contracts are associated with physical legal documents that must be signed. However, in reality, only a few types of contracts must be written.

Difficulties Of Verbal Agreements

Even though most contracts do not require a physical aspect to be valid, one of the reasons why verbal agreements come under scrutiny is due to their nonphysical form. It is tougher to enforce an oral contract when there is not any physical proof to fall back on.

Written contracts do not present this type of problem as they can be easily used to verify the agreement and parties involved.

Enforceability

Enforcing verbal agreements can be difficult. If there is a dispute with a verbal agreement and it ends up going to court, one party or both parties could lie about what was agreed upon. This makes it close to impossible for the courts to make a decision, and it’s one of the main reasons why verbal agreements are less enforceable by a court.

It is much easier for a court of law to enforce a physical contract that has been signed by the parties who are involved. If one party of a verbal agreement is attempting to enforce a verbal agreement, they must be able to prove to the court that specific terms were agreed upon.

Making A Valid Verbal Agreement

If a verbal agreement is going to be made, both parties who are involved in the agreement should discuss the aspects of enforceability. This can be done by achieving a firm understanding of the agreement. This means that each individual who is taking part must be cognizant of the roles that they are going to play to make the verbal agreement a success.

For example, if a man hires an independent roofer to lay shingles on the top of his home, both the homeowner and the independent contractor must understand the square footage of the roof, the material being used and any other factors that are associated with making the roofing job a success.

5 Aspects Of A Strong Verbal Agreement

There are five aspects that can be used to ensure that a verbal agreement is the best that it can be. These include the following:

Good faith – Both parties who are entering the verbal agreement should attempt to fulfill their obligation.
Mutual consent – Both parties understand the criteria that they are agreeing to fulfill.
Offer and acceptance – Both parties are willing to part with something so that they can get something back in exchange.
Performance – Each party has certain duties that must be performed to fulfill the verbal agreement.
Mutual consideration – An exchange of services, goods or rights will be completed.