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Verbal contracts are legal, but can you prove them?

On Behalf of | Apr 15, 2017 | Blog

Do you remember the old days when businesspeople in Nevada, and just about any town in America, would discuss a few issues, iron out their own details, smile, shake hands and seal the deal? Nowadays, you hear contract advisers saying it’s best to get everything in writing. This isn’t because verbal agreements aren’t legally enforceable. They absolutely are. However, try to prove one. It’s possible, in certain situations, to do so, but it’s usually quite difficult.

If you’re considering entering an agreement with one or more parties, and you’re also considering doing so verbally, this post provides pertinent information regarding verbal contracts that may benefit you and others involved in your particular situation.

What exactly is a verbal contract?

Many often refer to a verbal agreement as an oral contract. It means you enter a binding agreement without memorializing it in writing. Although, this type of contract can be just as valid as any written agreement, complications often arise when someone accuses someone else breaching it. A few basic facts regarding verbally committed contracts include the following:

  • When two or more parties speak their intentions and define terms of an agreement in oral communication, once they agree to the terms, it becomes legally binding. 
  • If someone commits to providing you a service or work for a certain amount of money, and you agree to those terms, you obligate yourself to pay for the completed work, and that person takes on the obligation of doing the work.
  • It’s typically best to enlist the help of witnesses before securing a verbal contract. Someone who witnesses all involved speak the terms of a proposed contract, as well as verbally agree to those terms can then attest to that fact if a problem regarding a breach of contract arises down the line.
  • Some types of transactions specifically require written contracts, such as the sale of land or other real estate.
  • You can’t agree to do something illegal by means of an oral contract. The court will never enforce a contract that includes a promise to sell heroin or other illegal drugs, or commit any other type of criminal act.

In short, if you’re wondering whether you could legally enter into a contractual agreement without putting anything in writing, the answer is: in most cases, yes (unless it falls under the categories requiring writing or unenforceable as listed above). However, if you plan to do so, you’ll likely want to ask several people to witness the agreement (which means they have to hear the terms and agreement to the terms spoken aloud).

Of course, the safest course of action would involve a written agreement. However, if you’re worried about any aspect of a proposed verbal deal, or, you are already bound to an oral agreement and someone breaks the terms, you can take similar steps as others in Nevada in the past who turned to experienced business and commercial law attorneys for help.