What is a verbal contract? This type of contract is an agreement between two people that is not written down. It is an exchange of promises to participate or conduct business in a certain manner. Many people think that, unless an agreement is written down, it is not enforceable by law, but that’s not true. While these kinds of agreements are hard to enforce and even harder to prove, a verbal contract is legal, and it is possible to resolve disputes over them.

Verbal Contracts
To be a true verbal contract, rather than a verbal agreement, the conversation must meet certain conditions. In a verbal contract, the seller of goods or services must make a formal offer. The seller would state everything from price, delivery dates and other relevant information in detail rather than vague generalities. The buyer would need to make a verbal affirmation of agreement to the terms. Sometimes money is exchanged during a verbal contract, but it is not necessary.

Problems With Verbal Contracts
One of the main issues with verbal contracts is that the agreement is not permanently recorded, and if a dispute does arise, the evidence is based only on the recollection of the two parties. If that recollection differs, the negotiations could descend into a deadlock, with each party feeling his version is correct and having no way to prove it. One way to overcome this is to conduct a verbal contract in front of at least one witness, preferably two.

Proving Breach Of Verbal Contract
While verbal contracts are legally binding, the burden of proof is difficult to achieve during a dispute. A party must prove that not only was a verbal contract made, but the terms of the contract were also violated. Beyond a witness to the verbal exchange, the unhappy party must show that the other party didn’t follow through with the agreed-upon action. One way to show this is, if previous work or partial work had been done, it would establish a pattern of behavior that would back up the verbal agreement.