The Enforceability of Oral Contracts

Does a Contract Have to be Written In Order to be Enforceable?

No. Many people assume that a contract must be written in order for it to be legally enforceable. This is generally not true, as many verbal agreements can be legally binding as long as they meet certain conditions. There are some exceptions to this, depending on the purpose of the contract and how the agreement was constructed. For example, contracts dealing with the conveyancing of real-property should be in writing.

Will an Oral Contract Stand Up In Court?

A verbal contract may stand up in court if the proper contractual elements are present and the Court finds that it is a valid contract. In order to have a valid legal contract (written or verbal) the following contractual elements must be present:

• An offer;
• Acceptance of the offer;
• Consideration (an exchange of something of value by both parties); and
• An intention to enter into legal relations.

How Do You Prove the Existence of an Oral Contract?

Proving the existence of a verbal contract can be difficult. Instead of relying on a written agreement, you may have to rely on evidence such as witness testimony, supporting documents or the actions of the parties in order to establish that a contract exists. Documents such as letters, text messages, emails, cancelled cheques or bank statements may provide helpful evidence regarding the existence of an enforceable verbal agreement. Oral Contracts can often create grey areas for the Courts and for the parties involved. Therefore, it is always advisable to get a contract in writing and to have a lawyer help you review the terms.