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Are verbal contracts legally enforceable?

Is a verbal offer to do business with someone for a cut of profits enforceable? What if someone verbally opts out and then changes their mind and still wants the cut? If you offer are you obligated to stick with them even if the relationship goes south or they bring little value to the business? I know you're not an attorney, so your opinion please.

Dave's Answer:

Generally, oral or verbal contracts are indeed legally enforceable, but there's a fundamental problem: how do you prove what was agreed upon? That's why written contracts are far more useful, because everything's down in, well, black and white.

Here are some thoughts on this subject from around the Web.

Fran Przyblewski wrote a good piece in SeniorMag that highlights:

"The problem with verbal contracts are that they are often very hard to prove, especially if they are very complicated or have no independent witnesses. The parties themselves may not even recall the exact details to which they agreed. Therefore, if neither side can can show a written contract, judges are often forced to apply "fairness" or other governing state laws. The problem with "fairness" is that at least one person won't consider it "fair."

"In general, try to avoid verbal contracts. Anyone that wants you to agree to something but won't put it into writing, just isn't worth the time. And they are very likely out to scam you."

Wikipedia, in its article about oral contracts, says:

"In general, oral contracts are just as valid as written ones, but some jurisdictions either require a contract to be in writing in certain circumstances (for example where real property is being conveyed), or that a contract be evidenced in writing (though it may be oral). An example of the latter being the requirement that contract of guarantee be evidenced in writing that is found in the Statute of Frauds. Similarly, the limitation period prescribed for an action may be shorter for an oral contract than it is for a written one."

And, finally, Law.com says:

"an agreement made with spoken words and either no writing or only partially written. An oral contract is just as valid as a written agreement. The main problem with an oral contract is proving its existence or the terms. As one wag observed: "An oral contract is as good as the paper it's written on." An oral contract is often provable by action taken by one or both parties which is obviously in reliance on the existence of a contract. The other significant difference between oral and written contracts is that the time to sue for breach of an oral contract (the statute of limitations) is sometimes shorter. For example, California's limitation is two years for oral compared to four for written, Connecticut and Washington three for oral rather than six for written, and Georgia four for oral instead of 20 for written."

Hope that's helpful. Good luck.

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Categorized: Business and Management (Article 6701)
Tagged: contract law, oral contract, verbal contract
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Comments

"A verbal contract is not worth the paper it is written on"

Posted by: Sansfaim at August 7, 2006 11:47 AM

ques. former friend received forecloser letter from bank he was going to let them have it back i said let me buy it for what the bank wants him to pay or lose it he said ok 911.00 that day icame up with 750 went to bank with him ask if i could hav a week to get remainder bank said sureall igot was the bank receipt with his name my name on nothing due to not having it all to get deed that day payed another 100 leaves my balance at 50/ now hesays deal off wont take my 50 were do i stand leaglly how do i get my land

Posted by: john at February 20, 2007 2:14 PM

Can't advise you on this situation, John, but it seems to me that it's fishy the bank didn't actually generate a proper receipt that indicating what the payment was for, what amount remained, etc. You also should have had a contract - written, not verbal - with your friend indicating that if you assumed the debt you would also receive the transferred deed for the property. Good luck with this one.

Posted by: Dave Taylor at February 27, 2007 12:07 PM

I agreed to but a cricket outfield roller from Leicestershire CCc for £600. I visited their site twice the last time being two weeks ago to view the item. It would not start but they promised to get it goimg. If this was a problem I told them to get a third party in a I would pay. I went away to arrange transport. I phoned them last week without any rersponse. I phoned them on Friday to make final arrangements but they told me they had already sold it (In the last two weeks I presume). This was done without any contact with me.

Have they broken a verbal/oral contract.

Posted by: Roger Wilks at March 18, 2007 1:51 PM

I was going to buy a car from a dealer. I called and confirmed a price. I was sent an e-mail stating the price. I then asked two or three times if this price was correst. I was told the price was correct. Then my wife and I went to see the car. I went to buy the car. When I got to the dealer I again asked two or three times was this price correct, I was told it was and that the sales person had checked the price with their manager. Then they brought me the paper and aske dso do we have a deal and I said yes, I have the paper with the agreed upon price. Then I asked agin three or four times is this the correct price and again I was told it was. When we went to the finance department. They took the paper work into the other room. The sales person came back and said that there had been a mistake! We were $ 8,000 a part on the deal.

Do I have any recourse?? I have the e-mail and the deal they offered me in my hands.

Thank YOU,

Posted by: John Mc Bryan at August 20, 2007 11:13 PM

I have an oral agreement with a gentleman to paint an apartment complex. After completing the first coat of paint, he told me that he needed me to not work for a week because he was short on money. I discovered that he had gotten another painter to complete the work for a cheaper price. I went to this person and questioned him about this and he told me that the other person was only doing some touch-up work and that he still wanted me to finish the job. This was 3 weeks ago and the second coat of paint is now complete and the person is now working on the interior. The only evidence that I have is a hand written estimate. Do I have any recourse?

Keith Plumley
Atkinson, GA

Posted by: Keith Plumley at October 31, 2007 4:10 AM

Hi Dave,
I was offered a position in a real estate firm . The affiliated position I was asked to be involved in was this: One partner of the firm wanted me to be his sole Buyer's Agent. Thus , the team of his was the partner doing the listing of properties, his secretary ( paid contractual employee) conducted the paperwork etc) and me - the buyer's agent for all buyers who inquired on the Partner's properties or who were referred directly to him through friends, banks etc.
All was as agreed upon until the secretary started withholding buyer inquiries from me and keeping them for herself and the Partner. Prior to this behavior she had been demeaning to me and I had attempted to address this in a professional manner with the partner and then at his suggestion with the two of them.
In the end, she had kept many buyers for herself( although her contractual agreement forbid her from showing property, so perhaps she knew she would be successful in getting rid of me( somehow she must have envied my youthful energy ( we are same age but I am much younger in many ways) and then either she would have -or she could give to her boss - the partner- those coveted buyers whom she'd 'stolen' from me.

Since my verbal contract for 4 + months was pretty consistent, what strategies, suggestions do you have when I go to mediation with the local board?
Thank you very much

Posted by: Deb Boyjian at February 20, 2008 8:42 AM

I have a lot to say, but ...

I have a lot to say, and questions of my own for that matter, but most of all I'd like to say thank you for all your efforts on this Web site by buying you a chai!

I do have a comment, now that you mention it!