1. Can Oral Contracts Be Enforced?
2. Statute of Frauds
3. Burden of Proof
4. Basics of an Oral Contract

The enforceability of oral contracts depends greatly on the available evidence and the type of contract made. Oral contracts are spoken agreements that are not in writing. Many forms of oral contracts happen every day, and many are enforceable. However, there are a handful of contract types that must be in writing with the appropriate signatures in order to be enforced.

Can Oral Contracts Be Enforced?

Although many believe you can only hold someone to a promise that is in writing, that's not necessarily the case. Some oral contracts are, in fact, enforceable. Trying to hold someone to an oral contract in court tends to turn into a battle of the "he said, she said" arguments, but it can be done. Usually, the more physical evidence you have, the more likely your contract will be enforced. You can have evidence of a contract without an actual written agreement.

Implied contracts are another type of unwritten contract that can also be enforced with the right amount of evidence. If you've entered into an oral or an implied contract, and the other party breaches the contract, you do have a right to pursue legal action.

If you're planning to form an agreement with someone regarding something of value to you, it's always best to put things in writing. Even when you trust the other person, putting things in writing ensures everyone's on the same page and understands his or her responsibilities in the agreement.

In the event that you enter into an oral contract, or any other type of contract, with another party, and that party is not upholding its end of the agreement, it's a good idea to contact a contract lawyer. An experienced attorney will help you make smart decisions regarding the situation and figure out the best way to move forward with the issue.

Statute of Frauds

Although many oral contracts can be enforced, they are some cases where an oral contract cannot be enforced. These cases usually involve high-value items or long-term agreements.

Under the Statute of Frauds, written contracts are required for the following types of agreements:

  • Real estate agreements for sales or lease agreements meant to last longer than a year.
  • Ownership transfers due to the death of the original owner.
  • Any agreements with an obligation that will take longer than a year to fulfill.
  • Debt coverage agreements.
  • Any agreements that are meant to outlive either of the parties involved.
  • Any agreements regarding items of a certain value.

Different states vary on what they consider a high-value item. Therefore, in one state you may need a written contract to cover the purchase of something worth $5,000, but another state might not require anything in writing unless the item is worth $10,000.

Usually, if the subject of a contract falls into any of the above categories, a court will only enforce it if it's in writing. There are a few exceptions to this rule, however.

If the injured party, or the nonbreaching party, can prove he or she has suffered as a result of trusting in the promise of the party who breached the agreement, the injured party can sometimes get a court to enforce his or her nonwritten agreement.

Burden of Proof

When trying to enforce an oral or implied contract, the burden of proof lies with the plaintiff. This means the person trying to hold a breaching party to his or her end of an agreement must be able to provide proof of the agreement in order to get the court to enforce it.

It is unlikely that a court will enforce an oral contract without the plaintiff providing proof. Physical proof commonly used in such cases includes:

  • Emails.
  • Text messages.
  • Checks.
  • IOUs.

If you can provide any items that prove the contract was made and was not fulfilled, you may be able to have a court enforce it.

Basics of an Oral Contract

In order to have a valid contract at all, you'll need at least these three basic elements:

  • Offer.
  • Acceptance.
  • Consideration.

First, a party needs to make an offer to enter into an agreement with the other. Then, the other party must accept that offer. Finally, there must be some form of consideration exchanged.

The consideration is the payment element of a contract or agreement. Without consideration, you don't have a contract — you have a gift. This is also called the exchange of promises. For instance, if you are selling your car and offer a buyer the car in exchange for $4,500, the money is the consideration being exchanged for the car.

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