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Oral Contracts: Are They Enforceable?

Oral Contracts

People often ask if oral contracts are recognized and enforceable as an agreement between two individuals. The short answer is yes, in most states oral or verbal contracts are enforceable and recognized. An oral contract is a verbal agreement between two parties that is not made in writing but instead is spoken. This is an agreement that is made within a conversation and sealed with a handshake. The agreement is usually for one party to do something in exchange for the other and vice versa. These verbal contracts are enforceable most of the time can be upheld in a court of law. However, there are a few exceptions to certain kinds of contracts being made verbally. For instance, in Texas, there is a statute of fraud rule which means there are certain contracts that must be in writing in order for them to be enforceable. For example, some of these contracts are those for the sale of land, loans over $50,000 dollars, or contracts lasting over one year. These types of contracts must always be made in writing to ensure they are legally enforceable. If the contract you are trying to make falls into one of the above-mentioned categories you must have them in writing to protect yourself. Some of the contracts mentioned in the statute of frauds are debatable, such as the contracts lasting one year. This is because there could be a contract that could take someone close to one year to complete but may go over. This does not follow under the statute of frauds because it could have been completed in under a year. Another example of a debatable contract is a contract that is to last throughout someone’s life. This may not have to fall under the statute of fraud because it could happen to be that one of the parties does not even live a full year. These lifetime contracts could escape the statute of fraud rule since no one is guaranteed to live a certain length of time. This is why some of the statutes of fraud rules for contracts are up for interpretation. However, if the agreement is for something that is clear to take longer than a year, put it in writing. It is important to note that just because a verbal contract falls under the statutes of fraud that does not necessarily mean the case or contract is automatically thrown out. There are many exceptions and defenses for these situations and are viewed on a case-by-case basis.

Oral Contracts or Written Contracts?

Now, just because oral contracts are enforceable, unless they clearly violate the statutes of fraud rules, that doesn’t mean having an oral contract alone is the way to go. Business law attorney Briana Robertson recommends always getting a contract in writing. A written contract is a lot easier to refer back to and prove in a court of law. Having the agreement clearly laid out in front of you on paper makes it hard for the agreeing parties to argue or dispute what was agreed upon. It removes the guesswork for the judge to decide if this was an actual oral contract or a meeting of the minds. It makes it clear that there was a specified agreement made and both parties were aware they were entering an agreement. A written contract also has room for interpretation and can be up for discussion on what was being agreed upon however, it will never leave the door open to say there wasn’t an agreement at all. A written contract removes the step of proving there was in fact an agreement. In an oral contract case, you must first prove there was a meeting of the minds between two or more people, next you must prove there was an agreement made and what the terms of that agreement were. Finally, if you can prove those things you must then prove the agreement was breached and therefore you are seeking legal action because of it. Although oral contracts can be enforced and upheld in court it is always best practice to get all contracts and agreements in writing. Trying to prove your case in court for an oral contract can be costly and take a lot longer than if you simply just get the agreement in writing to begin with. Make your life easier by getting all of your business agreements in writing and signed by all parties involved. Do you have questions about contract law? Attorney Briana Robertson is always ready to help you with any business law needs. Contact the Law Office of Briana C Robertson and schedule a FREE consultation today!

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Do you have questions about contract law? Attorney Briana Robertson is always ready to help you with any business law needs. Contact the Law Office of Briana C Robertson and schedule a FREE consultation today!

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