Verbal (Contract) Agreement
A Verbal Agreement is a contract formed through spoken words rather than written documentation.
- AKA: Oral Agreement, Verbal Contract.
- Context:
- It can (typically) be legally binding contract enforceable in court if it meets the basic requirements of contract law, including mutual consent and a clear exchange of value between the parties.
- It can (often) be difficult to prove due to the lack of written documentation, making evidence such as witness testimony, written communications, or proof of actions critical for enforcement.
- It can be subject to limitations, such as the statute of frauds, which requires certain contracts—like those involving real estate or agreements that cannot be performed within a year—to be in writing to be enforceable.
- It can also be more vulnerable to disputes and misunderstandings due to ambiguities in the verbal communication of terms.
- ...
- Example(s):
- A verbal agreement where a homeowner hires a landscaper to perform services, and both parties verbally agree on the scope and payment, is legally binding if all the elements of a contract are present and can be proven.
- A handshake deal between two parties agreeing to sell a car could be enforceable if the terms are clear and there is evidence of the transaction, such as payment or witness testimony.
- ...
- Counter-Example(s):
- A Real Estate Contract is not enforceable as a verbal agreement due to the statute of frauds, which mandates that such contracts must be in writing.
- See: Contractual Term, Statute of Frauds, Contract Law, Common Law, Contract Management, Legally Binding Contract.
References
2024a
- (ChatGPT-OpenAI, 2024) ⇒ Prompt: Summarize the concept Verbal (Contract) Agreement in 1- 2 paragraphs. ChatGPT (model:gpt-4o). Retrieved: 2024-08-25.
- QUOTE: A verbal (contract) agreement is an arrangement between parties that is established through spoken communication rather than in writing. Despite the absence of a written document, a verbal contract can be just as legally binding as a written one, provided it meets the fundamental requirements of a contract: offer, acceptance, consideration, mutual intent to be bound, and legality of purpose. For a verbal agreement to be enforceable, it must be clear and unequivocal, with all parties understanding and agreeing to the terms.
However, proving the existence and specific terms of a verbal contract can be challenging, as it relies on the testimony of the parties involved and any available circumstantial evidence. Consequently, certain types of agreements, such as those involving real estate, debts, or contracts that cannot be completed within a year, are often required by law to be in writing under the Statute of Frauds to be enforceable. Despite these challenges, verbal agreements remain an integral part of everyday business and personal transactions, relying heavily on trust and the integrity of the involved parties.
- QUOTE: A verbal (contract) agreement is an arrangement between parties that is established through spoken communication rather than in writing. Despite the absence of a written document, a verbal contract can be just as legally binding as a written one, provided it meets the fundamental requirements of a contract: offer, acceptance, consideration, mutual intent to be bound, and legality of purpose. For a verbal agreement to be enforceable, it must be clear and unequivocal, with all parties understanding and agreeing to the terms.
2024b
- (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/Oral_contract Retrieved:2024-8-25.
- An oral contract is a contract, the terms of which have been agreed by spoken communication. This is in contrast to a written contract, where the contract is a written document. There may be written, or other physical evidence, of an oral contract – for example where the parties write down what they have agreed – but the contract itself is not a written one.
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 (although the contract itself may be oral). An example of the latter is the requirement that a contract of guarantee be evidenced in writing, which 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.
The term verbal contract is sometimes used as a synonym for oral contract. However, since the term verbal could also mean just using words, not only spoken words, the term oral contract is recommended when maximum clarity is desired.
- An oral contract is a contract, the terms of which have been agreed by spoken communication. This is in contrast to a written contract, where the contract is a written document. There may be written, or other physical evidence, of an oral contract – for example where the parties write down what they have agreed – but the contract itself is not a written one.
2024c
- (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/Contract#Written_and_oral_contracts Retrieved:2024-5-6.
- A contract is often evidenced in writing or by deed. The general rule is that a person who signs a contractual document will be bound by the terms in that document. This rule is referred to as the rule in L'Estrange v Graucob or the "signature rule".[1] This rule was approved by the High Court of Australia in Toll(FGCT) Pty Ltd v Alphapharm Pty Ltd.[2] The rule typically binds a signatory to a contract regardless of whether they have actually read it,[1][2] provided the document is contractual in nature. [3] However, defences such as duress or unconscionability may enable the signer to avoid the obligation. Further, reasonable notice of a contract's terms must be given to the other party prior to their entry into the contract.[4] [5] Written contracts have typically been preferred in common law legal systems. [6] In 1677 England passed the Statute of Frauds which influenced similar statute of frauds laws in the United States and other countries such as Australia. In general, the Uniform Commercial Code as adopted in the United States requires a written contract for tangible product sales in excess of $500, and for real estate contracts to be written. If the contract is not required by law to be written, an oral contract is generally valid and legally binding. [7] The United Kingdom has since replaced the original Statute of Frauds, but written contracts are still required for various circumstances such as land (through the Law of Property Act 1925). Nonetheless, a valid contract may generally be made orally or even by conduct.An oral contract may also be called a parol contract or a verbal contract, with "verbal" meaning "spoken" rather than "in words", an established usage in British English with regards to contracts and agreements, and common although somewhat deprecated as "loose" in American English. An unwritten, unspoken contract, also known as "a contract implied by the acts of the parties", which can be legally implied either from the facts or as required in law. Implied-in-fact contracts are real contracts under which parties receive the "benefit of the bargain".[8] However, contracts implied in law are also known as quasi-contracts, and the remedy is quantum meruit, the fair market value of goods or services rendered.
- ↑ 1.0 1.1 L'Estrange v Graucob [1934] 2 KB 394.
- ↑ 2.0 2.1 .
- ↑ Curtis v Chemical Cleaning and Dyeing Co [1951] 1 KB 805
- ↑ .
- ↑ .
- ↑ Michida S. (1992) Contract Societies: Japan and the United States Contrasted. Pacific Rim Law & Policy Journal.
- ↑ Trans-Lex.org: international principle
- ↑ .