As a professional, I am often asked about the legality of breaking a verbal contract. While verbal agreements are legally binding in most cases, there are a few exceptions to this rule. Here`s what you need to know about verbal contracts and their enforceability.
What is a verbal contract?
A verbal contract, also known as an oral contract, is an agreement made between two or more parties without any written documentation. This type of contract is often made in casual settings, such as a conversation between friends or business associates. However, verbal contracts can also be made in formal settings, such as a meeting between two companies.
Are verbal contracts legally binding?
In most cases, verbal contracts are legally binding. This means that if both parties agree to the terms of the contract and exchange something of value, such as money or services, then the contract can be enforced in court. However, there are a few exceptions to this rule.
Exceptions to the rule
There are several situations where a verbal contract may not be enforceable. For example:
1. The contract involves the sale of real estate
In most states, contracts for the sale of real estate must be in writing to be enforceable.
2. The contract involves the sale of goods
If the contract involves the sale of goods worth $500 or more, it must be in writing to be enforceable under the Uniform Commercial Code.
3. The contract is illegal or against public policy
If the contract involves illegal activities or goes against public policy, it will not be enforceable in court.
4. The contract is too vague or uncertain
Verbal contracts must be clear and specific in their terms to be legally binding.
What should you do if someone breaks a verbal contract?
If someone breaks a verbal contract, you may be able to take legal action to enforce the terms of the agreement. However, it may be difficult to prove the existence or terms of a verbal contract without written documentation.
To protect yourself, it`s always a good idea to put important agreements in writing. This can help clarify the terms of the agreement and provide evidence of the agreement if it is ever disputed.
In conclusion, while verbal contracts are generally legally binding, there are exceptions to this rule. It`s always a good idea to put important agreements in writing to protect yourself and avoid any potential legal disputes.