What Is a Legal Verbal Contract

In the world of business, contracts are an essential part of any transaction or agreement. However, not all contracts need to be in writing to be legally binding. A legal verbal contract is an agreement made between parties where the terms and conditions of the agreement are spoken, rather than written down.

A verbal contract is also known as an oral contract, and it is just as valid as a written contract in the eyes of the law. However, there are certain requirements that need to be met for a verbal contract to be enforceable.

Firstly, there needs to be an offer and acceptance. This means that one party must make an offer to another party, which the second party must accept. This is the basic foundation of any contract – an agreement between two parties.

Secondly, there needs to be consideration. Consideration refers to something of value that is exchanged between the parties. For example, if one party agrees to provide a service to another party, the consideration may be the payment that is made for that service.

Thirdly, the terms of the contract must be clear. Both parties must agree on the terms of the agreement, including what each party is required to do, when they are required to do it, and what happens if either party fails to fulfill their obligations.

Finally, there needs to be an intention to create legal relations. This means that both parties must intend for the agreement to be legally binding. If the parties are just discussing a hypothetical situation, or making a joke, there is no intention to create legal relations.

It is important to note that while verbal contracts are legally binding, they can be more challenging to enforce than written contracts. This is because there is no physical evidence of the agreement, and it can be difficult to prove the terms of the agreement.

If you are entering into a verbal contract, it is always a good idea to have a witness present who can attest to the terms of the agreement. Alternatively, you can follow up the verbal agreement with an email outlining the terms of the agreement and asking the other party to confirm that they agree.

In summary, a legal verbal contract is an agreement made between parties where the terms and conditions of the agreement are spoken, rather than written down. To be legally binding, the verbal contract must meet certain requirements, including an offer and acceptance, consideration, clear terms, and an intention to create legal relations. While verbal contracts are enforceable, they can be more challenging to enforce than written contracts. If you are entering into a verbal contract, it is always a good idea to have a witness present or follow up with an email to confirm the terms of the agreement.