If you're wondering, "does a verbal contract hold up in court?" the answer is usually yes. However, it's usually better to put an agreement in writing to avoid any questions or problems down the road.

What Kind of Weight Do Verbal Contracts Carry?

In today's world of electronic communications, entering into a legally binding contract can be as simple as having a telephone conversation. You may not believe it, but a good old-fashioned handshake was all it used to take for two people to have confidence in the fact that neither party had a weapon on their person. Over time, the concept of the handshake began to evolve into a symbol that indicated a verbal agreement had been reached.

There has been a lot of speculation over the years over whether or not a verbal agreement is legally binding but, the fact is, they are. While it's normally preferable to put a contractual agreement in a written document that outlines the agreement's terms, verbal agreements can be upheld under established laws.

It's always best to get advice from an attorney with a good understanding of contracts when you need help with matters pertaining to the laws associated with contracts. It is worth noting that a lot of powerful people have participated in deals that were sealed by a simple handshake, including iconic figures like:

  • Bill Clinton
  • Bill Gates
  • Newt Gingrich
  • Steve Jobs

It's highly likely, however, that these deals were later followed up with extensive contracts that detailed important terms and points of the agreement in question. If you're the kind of person that prefers informal deals that only require a handshake to seal, you should at least consider having people present that can bear witness to the agreement being made. Having witnesses present is a solid way to guarantee your handshake agreement is more legally binding than it would be without anybody to confirm it was actually made.

What Is a Verbal Contract?

A contract can be either verbal or written. However, verbal contracts are agreements that have been made between two parties or more on a completely spoken basis, with no written communication taking place.

Say, for example, a contractor comes to your house and offers to remodel your bathroom for $10,000. If you both agree to these terms, you're entering into a verbal contract. If you later refuse to pay the agreed-upon price, the contractor has the right to take you to court and would likely win the case. Likewise, if the contractor does not complete the job according to your agreement, you can ask the court to order him to do so.

Keep in mind, though, that it's one thing to enter into a verbal contract and something else entirely to prove the agreement or specific terms of the agreement actually exist. This makes verbal contracts potentially dangerous from a legal point of view due to the fact that there is no concrete evidence they have actually taken place. If either of the involved parties in a verbal agreement has a disagreement regarding the terms of said agreement, they can take their concerns to court.

Without sufficient evidence that the contract exists, however, or what the specifics of the agreement entail, the court may be unable to enforce a contract that has been breached. In the event that neither involved party can offer evidence of the existence of the contract terms in question, such as a witness, there really aren't any practical means with which to enforce the agreement. Also, it's not possible to create a legally enforceable verbal agreement if any of the activities involved in the agreement are illegal.

For instance, you can't enter into a verbal contract with someone to procure illegal substances in exchange for money and expect to be able to take them to court if they fail to uphold their end of the deal. Despite the fact that you both agreed to the specific terms of the agreement, no court will enforce this agreement because the activities required to execute it are in violation of either state or federal laws.

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