How to Know If a Verbal Agreement Will Stand Up in Court

Contractual agreements play an integral role in the operations of any business.  When entering into a contract, each party is responsible for upholding its terms.  This is true whether the agreement is written or verbal.  However, whereas written contracts generally contain more detail about the expectations and obligations of each party to the agreement, , verbal agreements often lack detail and clarity, and can consequently be challenging to prove and enforce if they are breached, especially without the help of an attorney.  When all of the requirements for a contract are present, however, verbal agreements can be legally binding and enforceable.

What Makes a Verbal Agreement Enforceable?

A verbal agreement must meet certain conditions to be considered enforceable.  It must include an offer, an acceptance of the offer, and consideration.  An offer is a proposal made by one party to the other to do or refrain from doing a specified action.  Acceptance is the other party’s agreement to the specified action or nonaction.  Consideration is something of value, such a money, that is exchanged for the specified action or nonaction.   In addition, the purpose of the agreement has to lawful, and the terms cannot be vague, misrepresented, or incomplete. To prove a breach of contract, attorneys will gather any information that helps show a verbal agreement was made.  This may include emails, faxes, letters, witness statements, or proof of one party’s performance, such as photographic evidence or a delivery receipt. 

When Are They Unenforceable?

Most, if not every, state will have a statute, known as the “statute of frauds” that requires certain contracts to be in writing to be legally binding.  Most notably, contracts for the sale of real estate, or surety agreements, by which one person agrees to become responsible for (or guarantee) the another person’s contractual obligations, or contracts for services that may take more than one year to complete, must be in a signed writing in order to be enforceable.  In Kentucky, there is also a statute of limitations, which dictates that a party has no more than five (5) years to file a claim for breach of an oral contract.

If you need the assistance of an experienced contract attorney, please contact Gess Mattingly & Atchison P.S.C.   Since 1954, the firm has been representing clients throughout the Commonwealth of Kentucky, and has grown to become a full-service law firm with the ability to serve a diverse clientele in a variety of practice areas, including, but not limited to: Appellate Law; Bankruptcy & Financial Restructuring; Business & Commercial Law; Commercial & Residential Real Estate; Criminal Defense; Equine Law; Family Law; Health Care Law; Litigation; Mediation; and Tax, Trust & Estate Planning. Call (859) 252-9000 to request a consultation, or visit their website to learn more about the legal services they perform. This is an advertisement.