Whats a Verbal Contract

What`s a Verbal Contract?

A verbal contract, also known as an oral contract, is a legally binding agreement made between two parties through spoken words rather than written documentation. The agreement can be as simple as buying a product from a vendor, or as complex as a partnership agreement.

While verbal contracts are just as enforceable as written contracts, they can be difficult to prove in court as they rely solely on the memory of the individuals involved. This is why it is always recommended to have a written contract in place to avoid any misunderstandings or disputes down the road.

In order for a verbal contract to be considered legally binding, it must meet certain criteria, including:

1. Offer and Acceptance: Both parties must have agreed to the terms of the contract, which can be demonstrated by a clear and unambiguous offer and acceptance.

2. Consideration: Each party must have given something of value to the other, such as money or services, in exchange for the agreement.

3. Intent: Both parties must have intended for the agreement to be legally binding.

4. Capacity: Both parties must be legally competent and have the authority to enter into the contract.

It is important to note that certain types of contracts, such as those involving the sale of real estate or goods worth over a certain amount, must be put in writing to be enforceable. Additionally, there are statutes of limitations in place that dictate how long you have to file a claim for breach of a verbal contract.

In conclusion, while verbal contracts can be legally binding, it is always best to have a written contract in place to avoid any potential disputes or misunderstandings. If you do enter into a verbal contract, be sure to document the terms and conditions of the agreement as best you can to help with any potential legal action later on.