Will a Verbal Agreement Hold Up in Court?
This is a question that many consider after entering into a verbal agreement for either a transaction or service agreement.3 min read
2. Proving the Existence of an Oral Contract
3. Statute of Frauds
4. Statute of Limitations
5. Are Verbal Contracts Legal in Court?
Will a verbal agreement hold up in court? This is a question that many consider after entering into a verbal agreement for either a transaction or service agreement.
Elements of a Contract
Verbal agreements can be difficult, but not impossible, to enforce in court. When possible, it is best to encourage enforceability through the use of a physical legal contract. The following elements are required when creating a contract:
- Mutual assent of meeting of the minds: This means that both parties must be fully aware of the contract and the specific terms of the contract.
- Offer and acceptance: This means that one party has made an offer and the other party has accepted the offer.
- Consideration: This refers to both parties giving up something for the exchange. Both exchanged items must hold a value and not be a false item.
If any of these contract elements are lacking, whether in an oral or physical method of contract, it is unlikely to hold up in court. It can also be difficult to prove that each of these required elements of the contract was met with a verbal agreement.
Proving the Existence of an Oral Contract
One of the biggest challenges to proving that an oral contract took place is the lack of evidence itself. When you have a physical contract, you can prove that the other party signed in agreement. In a verbal contract, it is often one parties' word against another. Fortunately, there are ways to provide evidence for an oral contract:
- Evidence of services performed that are present in the alleged verbal contract.
- Proof of payments for services offered.
- A witness statement that was present during the verbal agreement. Hearsay, however, can be an issue.
- A written communication that references the verbal agreement. This could include Emails, text messages, or physical letters.
Statute of Frauds
The Uniform Commercial Code regulates all contracts that involve the sale of goods. A written contract is required for the sale of anything over $500. Depending on the specific state laws, a written contract may also be required for other items that are not considered to be the sale of goods.
The statute of frauds refers to state-specific laws regarding transactions. The statute of frauds requires that anyone engaged in the following transactions requires a written contract:
- The sale or lease of land
- Consideration of marriage
- A promise to repay a debt that extends over a year timeline
- Transfers of property
- Contracts that extend over a person's life
If an agreement is in one of these categories, the state will often not accept the claim of a verbal agreement. The claim of a verbal agreement may be accepted in the following situations:
- One party fully completed their end of the agreement.
- One party suffered damages due to the agreement.
However, it is the responsibility of the plaintiff to provide evidence. Even if a court agrees that a verbal agreement existed, it can still be difficult to enforce the agreement. Without an actual physical contract, the specific terms of the agreement are not known. The court is often relying on the word of each party. There are often many disagreements.
Statute of Limitations
It can also be difficult to distinguish the timeline of a verbal contract. The statute of limitations refers to the time limit of when a lawsuit can be filed due to a breach of contract. Because verbal contracts rely on the testimonial and statement of the parties, the statute of limitations is often much shorter. The statute of limitations might be extended, however, when fraud is expected.
Are Verbal Contracts Legal in Court?
Verbal contracts are legal and can be used in court. We currently live in a technological world, making it easier than ever to prove the existence of a contract. Documents of proof can include text messages, Emails, and phone calls. The court will accept either a verbal or physical contract in court. However, if you are dealing with the breach of an oral contract, it might be a good idea to work with an experienced contract attorney.
If you need help with determining legal actions with a verbal contract agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.