The Verbal Agreement—Explained
When doing business, it’s important to set out the rules and duties of each party involved ensuring there will be no obstacles later on. The best way to do that is by creating legally binding contracts in written form, such as the non-compete agreement or the non-disclosure contract. You can count on DoNotPay to generate both of those for you and many other legal documents!
What happens if that contract has to be in spoken form—does it still stand in court? We provide you with all the answers about the verbal agreement and how to prove it in court!
What Is a Verbal Agreement?
A verbal agreement is a contract made between two parties doing business. It contains all of the elements that a written and legally binding contract would contain. The only difference is that the verbal agreement, as the name suggests, is conducted in spoken form.
Certain contracts have to be in written form, such as the contracts for:
If you’re conducting business that does not require a written contract, we’ll provide you with all the necessary info on how to go about having a verbal agreement instead.
Are Verbal Agreements Legally Binding?
If you have decided on a verbal agreement instead of a written one, you are probably wondering whether the agreement is legally binding. The verbal agreements aren’t always legally binding, but there are ways to ensure that they stand in court!
If you include the following items in your verbal agreement, the chances of it being legally binding are much higher:
|Item||What To Do|
Offer and Acceptance
|Make sure that an offer had been made and accepted by the other party|
|An item of value has to be exchanged for a promise, and it does not have to be money|
|Both parties need to have the intention of making a legally binding contract and agree upon the matter|
|Each party involved must have the legal capacity to make the contract|
How To Prove a Verbal Contract?
Let’s say you made a verbal agreement with someone, and now you need to prove it in court. This can be quite challenging if there isn’t any proof of a conducted business apart from your word. Further issues that can arise are:
- The other party being dishonest about the terms of the agreement
- You and the other party remember the agreement differently
The best option to prevent difficulties in court is to have any type of document ready to support the verbal agreement. This doesn’t have to be a contract or a long document stating everything you covered in the verbal agreement. An email or a letter signed by both parties is often enough to convince the court.
Another way to prevent complications is to record the conversation while making the verbal agreement. You must discuss this with the other party, and you both need to agree upon it because you’re not allowed to record anyone without their knowledge. If the other party agrees to it, you can always have the recording ready and use it as proof of the verbal agreement.
The Advantages and Disadvantages of Having a Verbal Agreement
Like any other contract or legal document, the verbal agreement has its pros and cons. We will list some of the most common ones so that you can decide if it is the right choice for you.
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- Independent Contractor Agreement
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