If you have a valid verbal agreement, you can prove it by using evidence of the contract, such as receipts, invoices, emails, endorsed checks, payments, and credit card statements.
By Brad Nakase, Attorney
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Are Verbal Contracts Legally Enforceable? A verbal contract consists of two parties coming to an agreement but not putting anything in writing. A common question is whether this type of contract is enforceable by a court of law. If the agreement contains the elements of a valid contract, whether written or verbal, then it is indeed enforceable, and the parties have a legally binding contract. The necessary elements of a contract include the offer, the acceptance, consideration, and a meeting of the minds. While the Statute of Frauds requires that certain kinds of contracts be in writing, a contract generally does not have to be written down to be enforceable. An oral agreement that does not fall under the Statute of Frauds may be technically enforceable, but if there is a breach of contract or argument between parties regarding the contract’s terms, it can be hard to prove the elements of the contract in court. This is because there is often a lack of supporting evidence, such as written documents, that can back up the existence of a verbal contract or its terms.
In this article, our San Diego business litigation attorney discusses how to prove a verbal agreement in court as follows:
While it is true that a contract does not have to be in writing to be valid, there are certain notable exceptions. The Statute of Frauds is a law that requires certain contracts to be written down. The specific contracts covered by the Statute of Frauds varies by state, because each state has its own version of the statute. Most states have adopted a version of the Uniform Commercial Code, which controls contracts regarding the sale of goods. The UCC has a requirement that contracts regarding the sale of goods over $500, contracts regarding leases over $1000, and contracts regarding mortgages (or those involving a security interest) be in writing. Several states require other kinds of contracts to be in writing as well. For instance, Georgia mandates that contracts for the sale of land be in writing to be enforceable. Similarly, Georgia also requires that contracts that cannot be completed within one year be in writing.
Contracts are regulated by both state laws and common law, but there are some basic principles. To be considered valid and enforceable, a contract, whether it is written or verbal in nature, must possess the following four elements:
Offer
An offer may be defined as the manifestation of willingness to enter into an agreement made with another individual. This individual understands that his agreement to the bargain is welcome and will conclude the contract. An example of this would be the following statement: “I offer to sell you my used car for $1000.”
Acceptance
Acceptance is the clear agreement to the terms of the contract via the use of words, actions, or performance. Generally, contract law requires that the acceptance of an offer exactly reflect the terms of the offer. For example, consider the following statement: “I accept your offer to sell me your used car. I will pay you $1000.” That said, modern contract law acknowledges exceptions to the mirror image rule. Under the UCC, if an acceptance is clearly demonstrated, then there could be a binding sales contract even if the acceptance contains additional terms or if the terms are different than the original offer.
Consideration
Consideration occurs when something of value, such as money or a certain action, is pledged in exchange for the action or inaction of the offer. If there is no consideration, then there can be no contract. For example, if someone is offering another individual their used car for $1000, and the buyer promises to pay $1000 for the car, then the consideration is $1000. That said, if an individual offers to give another their used car for free, and the other person agrees to take it without offering anything of value in return, then there is not contract. In this instance, if the ‘seller’ failed to provide the used car as promised, the ‘buyer’ would have no legal recourse because there was technically no consideration, and therefore no contract.
Meeting of the Minds
Both parties to an agreement must have a mutual understanding, having agreed to the subject and terms of the contract. If the seller of a used car delivered a sedan to his buyer, but the buyer misunderstood and thought he was buying an SUV, then there would be no meeting of the minds. As a result, there would be no enforceable contract.
Additionally, the subject of the contract must be legal, meaning a contract to buy illicit drugs, for example, would not be enforceable. Also, all parties must have the mental and legal capacity to enter into a contract. Legal capacity refers to the requirement that all parties be of age, or over 18 years old. They must also be mentally capable of understanding the terms of the contract, and therefore not be under the influence of drugs or alcohol at the time the contract is created.
When an argument arises over the terms of a verbal contract, or when one party does not act according to the terms of the agreement, there becomes the issue of proving the existence of a verbal contract in court. In civil cases, the plaintiff has the burden of proof, meaning that they must prove that a contract exists through the use of substantial evidence. Through facts, the plaintiff must demonstrate that each of the elements of a valid contract exists. The plaintiff may need to offer evidence beyond oral testimonies, which may be conflicting. It is easy for there to be a “he said, she said” situation.
Evidence of a verbal contract could include proof of performance. This means that one party may have already performed their part of the contract according to the terms, thereby proving the existence of a contract. For instance, if the contract involved the sale of goods, then a receipt might prove that a buyer paid a seller. Witnesses to a verbal agreement may also offer evidence that a contract exists. In addition, any written communications between parties can serve as evidence of a verbal contract. These communications may include text messages and email, among other forms of writing.
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