Verbal Contracts

Full Video Transcript

Verbal contracts are generally binding. However, all states require that some types of contracts be in writing to be enforceable, such as real estate contracts. Disputes often arise with verbal contracts. For one thing, it’s hard to figure out what the parties actually had in mind. Also, memories fade, and if the terms of the deal aren’t written down, it can be a problem later. In a lawsuit on the matter, a court will look at evidence of whether a valid offer was in fact made and accepted and whether other typical formalities were involved for standard deals. However, a court might also enforce a verbal agreement even if the technical aspects of the agreement weren’t legally met. For example, if one side was silent and didn’t formally accept the offer but accepted the benefits; orr if one party genuinely relied on another’s representations to their detriment, then a court might enforce the deal or some version of it, simply in order to avoid an injustice. Whether or not a verbal agreement is enforceable is often a complicated inquiry for a court – and many, many factors will need to be examined to determine whether the agreement is legally enforceable or in special cases simply based on fairness.