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Is a Verbal Contract Enforceable?

When most people think about contracts, they picture a long written document full of complicated legal phrases. For the most part, they would be right. Most contracts are in written form, as written contracts do a better job of outlining the terms of the contract. However, a verbal contract can also be enforced under the right conditions.

While a verbal contract is not necessarily the best choice, especially for business contracts, if you need to enforce one you need an experienced attorney who can enforce your contract, and protect your rights. The attorneys at the Katz Law Group have the years of experience needed to analyze and enforce your verbal contracts.

Verbal Contracts - Enforceable or Not?

Verbal agreements between two parties are just as many contracts as written agreements, so long as they meet the requirements of a valid contract. If the agreement meets the requirements of a contract, both verbal and written agreements are enforceable.

Elements of a Contract

For a contract to be valid, it must have all of the essential elements of an enforceable agreement.

Offer

The first element is that of an "offer." An offer occurs when a party suggests terms of an agreement to another party. The terms of the offer must be sufficiently clear that a reasonable person could understand and be expected to follow them. If a person does not accept the terms but offers new or slightly different terms, it is considered a "counter-offer."

Acceptance

The offer, or any counter-offer, must then be accepted. Acceptance occurs when a party agrees to be obligated to follow the terms of the offer. In a verbal contract, acceptance may be as simple as saying something like:

  • "Agreed."
  • "I accept."
  • "Sounds good, you got a deal."

Many verbal agreements are often accepted with the shaking of hands in such a way to indicate that a deal has been made.

Consideration

Consideration is a legal term of art, which simply means that both parties are required to give something up in exchange for the contract. The most common consideration in contracts is money for goods or services.

Enforcing a Verbal Contract

While both verbal and written contracts are enforceable under Massachusetts law, verbal contracts are more difficult to enforce in many situations. To enforce a contract, the court must be able to know and understand the essential terms of the agreement.

Too often in verbal contract situations, the evidence turns into a "he said, she said" situation which makes it difficult to know what exactly was agreed upon between the parties to the verbal contract. Usually, the parties do not agree as to what the terms of the contract were, or how they were to be interpreted.

This does not mean that it is impossible. With the help of experienced legal counsel, you can prove in court the terms of the agreement in order to take action if there is a breach of your verbal contract.

How to Prove the Terms of the Contract

There are several different ways to prove the terms of the contract in court. First, if payment occurred from one party to another, that is evidence that some agreement for goods or services existed. Performance by one or both parties also indicates some form of agreement which had taken place in the past.

Witnesses can be called to provide eyewitness testimony. Witnesses would include the parties to the contract, as well as any third persons who were present at the time the agreement was made. Evidence can also be obtained from people who were a part of the agreement, i.e. through the labor force. Those individuals can testify as to what they believed the agreement to be.

Other written documentation may also be useful. In many cases, while the original contract was not reduced to writing, later invoices, emails, letters, or even text messages may provide proof of the oral agreement. Your Massachusetts contract lawyer can analyze the information in your case to determine the best way to prove the existence of the oral contract.

Oral Modifications of Written Contracts

In many agreement situations, a written contract may originally exist, but the parties agree to change a term or terms verbally. If this is the case, the oral modification is treated like a verbal contract and is subject to the same limitations and enforceability as other verbal contracts.

One important note--many written contracts contain a clause that any modifications must be in writing. This is very important to be aware of, as a verbal modification may be unenforceable, which may impact your rights.

Statute of Frauds

One issue that may come up with a verbal contract dispute is the Statute of Frauds. The Statute of Frauds is a law that states that certain contracts or agreements must be in writing to be enforceable.

Under the Massachusetts Statute of Frauds, the following must be in writing to be enforceable:

  • Agreements to pay from a person's estate;
  • Agreements to answer for the debt of another person;
  • Agreements upon consideration of marriage;
  • Agreements for the sale of land or any interest in land; and
  • Any agreement that is not to be performed within one year of the making of the agreement.

If the contract for any of the above is verbal, it is not enforceable. The same is true under the Uniform Commercial Code (UCC) for the sale of goods which exceed $500.00 in value.

Enforcing an "Unenforceable" Agreement

If your verbal agreement is unenforceable for some reason, especially if it violates the Statute of Frauds, this does not necessarily mean you have no remedy. While you will not be able to enforce the specific terms of your original agreement, you may be able to pursue what is called an "equitable" remedy in court.

An equitable remedy, such as promissory estoppel or unjust enrichment, is a claim which states that certain value was given to the other party and it would be unfair for that party to keep the benefit without paying for it. Your attorney would provide proof in a court of the value of the benefit conferred to the other party, and you would fight for money damages to compensate you for your hard work or goods.

Consult a Massachusetts Contract Litigation Attorney

If you have a verbal contract that needs to be enforced, the attorneys at the Katz Law Group can help you fight to make sure the terms of your agreement are followed, and that you receive the compensation to which you are entitled. Contact us today for a consultation.

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