Is a Verbal Offer Binding: Everything You Need To Know
Is a verbal offer binding? An unconditional verbal offer becomes legally binding and enforceable on its acceptance, just like a written offer.4 min read
Updated July 8, 2020:
Is a verbal offer binding? An unconditional verbal offer becomes legally binding and enforceable on its acceptance, just like a written offer. However, certain offers, such as in a real estate sale or purchase, must be made in writing.
Is a Verbal Job Offer Binding?
- A verbal or oral job offer can form a legally binding contract if it's accepted by the applicant. The legal position doesn't change just because some important terms of the contract (salary, etc.) are not yet finalized or the applicant hasn't started working yet. A verbal offer in such cases is no different from a written job offer.
- If you accept a job which is offered to you verbally, you enter into a legally enforceable contract. Thus, if someone offers you a job over the phone and you accept it, you cannot go for another interview, accept another job and then reject the offer you already accepted. Likewise, the employer cannot unilaterally withdraw a verbal offer of employment unconditionally accepted by you.
- The job offer must be unconditional. If the offer is made subject to certain conditions, like medical checkup or references, a final agreement is not formed until the set conditions are fulfilled. Mere acceptance of a conditional offer does not constitute a valid contract.
- A verbal job offer, which is made and accepted formally, is legally binding on both the parties. However, it's a bit more complicated than a written agreement since you must establish the terms of employment at the time of the offer.
- Usually, in the case of a verbal offer, there is no witness or any other proof of offer or associated conditions. That's the reason it's usually followed by a written confirmation. The employer offers you a job, you accept it, the employer sends across an offer letter, finally, you accept the offer in writing and a written contract is formed.
Verbal vs. Written Job Offer
Although a verbal job offer is no different from a written offer, it's good to have at least some part, like the job description, in writing. Legally speaking, a job offer, whether verbal or in writing, is of no significance unless you have a contract of employment, since either of the parties can rescind such an offer.
Job application and hiring processes differ from company to company. One employer may hire an applicant on the spot, while another company may have a multi-step process spread over a period of several weeks.
However, irrespective of the company culture, it's always better to insist on a written job offer. It gives you peace of mind and confidence, especially for submitting your resignation in your current organization.
In a verbal job offer, the hiring manager and the prospective employee negotiate the salary, perks, job responsibilities and the reporting day, among others. In the age of background checks and employee verification, making and accepting a verbal job offer implies a good amount of trust between the parties.
A verbal job offer is more of an informal type in nature, usually with very few parameters to restrict the work environment. For example, there may be no provisions for periodic pay hikes and paid leaves.
In most cases, a written job offer made initially, is a conditional one. It requires the candidate to pass certain pre-employment steps, like a background check and past salary verification, before being handed over a final written offer. After finalizing the terms of employment, when the candidate signs the written offer, it's prudent for him to get a copy of the same with the employer's signature.
Without an employment contract, you may lose the job even before you start. This risk is higher in the case of a verbal job offer because the employer can deny that he offered you a job, especially if you don't have anything to prove your side.
Verbal Offer to Sell or Buy Real Estate
In most of the states including North Carolina, contracts to buy or sell a property or real estate must be executed in writing; verbal agreements in such cases are invalid. If there is another offer already accepted and signed by the seller, you may lose the property to another buyer. Similarly, unless you put down the verbal agreement on paper and get it signed by the seller, you cannot enforce the agreement, and the seller can accept another offer. It's up to the seller whether he chooses to honor or reject a verbal agreement.
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