What to do if someone breaks a verbal agreement?

If someone breaks a verbal agreement, the first thing to do is to determine if the verbal agreement is valid. If the agreement is valid, hire and lawyer and sue for money damages or specific performance.

Brad Nakase, Attorney

Email  |  Call (888) 600-8654

Example of Someone Breaking A Verbal Agreement

Luanne is the owner of a bridal salon, where she designs and sews custom wedding dresses for brides. One day, she learns that her best friend, Kristy, is getting married. The two friends meet up at a café to celebrate, and Kristy joyfully asks Luanne if she will make her wedding dress. Luanne says that she is happy to do so, and they agree on a price of $2,000, which will be paid when Luanne completes the dress. The two women hug after they agree on the terms of the deal. Luanne immediately gets to work, spending a thousand dollars on materials and tools. Halfway through sewing the dress, Luanne gets a call from Kristy. Apologetically, Kristy explains that she found the perfect dress at another bridal salon and will no longer need Luanne’s dress. Luanne explains that she has already spent money making the gown, and that she will need compensation for her work. Kristy disagrees, saying that Luanne was offering her a favor, or a gift, and there was no actual contract. Luanne doesn’t know what to do. She wonders what can be done when someone reneges on a verbal agreement. Can she take Kristy to court to recover her money?

Is a Verbal Agreement Legally Binding?

It is a frustrating reality that sometimes individuals renege on a verbal agreement by not performing their duty or fulfilling their obligation. When this situation arises, the injured party can take a number of avenues. Potential responses range from taking the situation as a lesson learned to taking legal action against the transgressor. The appropriate response will depend on the subject of the contract, its overall importance, as well as the validity of the agreement.

While a verbal agreement is generally not a preferred form of contract, is can indeed be valid and legally binding in a court of law. Therefore, if an injured party wants to take the issue of the breached verbal contract to court, he or she is free to do so. However, one must first assess their options and whether legal action is the wisest step to take.

What Options Does an Injured Party Have in the Case of a Breached Verbal Contract?

When a verbal agreement has been broken, the injured party should ask themselves three vital questions before deciding whether to walk away, seek mediation, or file a lawsuit. It is best to discuss the options with the advice of an attorney experienced in contract law. The questions an injured party should ask themselves include the following:

  • Is there a valid legal case?
  • Would mediation be more effective than a lawsuit?
  • Would the plaintiff be able to collect on a judgment if they win?

When it comes to verbal agreements, it is difficult to decide whether there is a valid legal case. In general, mediation is a more cost-effective strategy than a lawsuit. It may also be the best option if one wants to preserve the relationship between parties. If the injured party wishes to collect a money judgment, then they should be prepared for further legal actions.

Is the Subject of the Verbal Agreement Important?

The subject of the verbal agreement is indeed important. The injured party must determine whether the contract falls under statutes of fraud and Uniform Commercial Code protections. These laws require that certain types of contracts be in writing for them to enforceable in a court of law. These contract types include the following:

  • Real estate contracts
  • Marriage contracts
  • Contracts that involve a co-signer
  • Purchase agreements for goods worth $500 or greater
  • Agreements with terms that cannot be completed in under one year

How Does an Injured Party Establish Evidence of a Breached Verbal Agreement?

A common problem that comes up when enforcing a verbal contract in court is the lack of evidence. That said, partial or significant performance of the contract’s terms can serve as the required evidence. This is the case even for agreements that are not in writing.

Let us consider an example. A man named Jason has an oral agreement to build a treehouse on his neighbor’s property in exchange for the cost of materials and tools, in addition to a $300 fee. Jason is halfway into construction of the treehouse when the neighbor reneges on the contract. A court of law might decide that the neighbor must return Jason to his pre-contract condition. This means that the neighbor may have to reimburse Jason. It is also possible that the court will order that the remainder of the contract be completed according to the original terms.

What Are Implied Contracts?

If an individual trusts the promise made in a verbal agreement to their detriment, or harm, then a court of law might consider the agreement to be legally binding. A common example of this situation involved statements made by an employer to an at-will employee. These statements may create an implied but legally valid contract between parties. This exact scenario played out in Toussaint v. Blue Cross & Blue Shield of Michigan (2009), when a court ruled that verbal statements concerning job security qualified as an implied employment contract.

Please tell us your story:

6 + 2 = ?

See all blogs: Business | Corporate | Employment

Family Member Stealing from Business

The best way to reduce the chance of embezzlement from a family business is to provide education to all employees, implement strict rules about how the company’s assets and funds can be used, and put in place controls that will spot wrongdoing immediately.

Director Stole Money from Company

An example of embezzlement is when a corporate director took money from a cash register and used the funds for his benefit.

Can You Force a Business Partner Out?

Partnership agreements and partnership law guide business partnerships. The partnership agreement determines when and how one partner may force another out of the business. Business partnership law controls the procedure for forcing a partner out if there is no partnership agreement.

Can I Take My Business Partner to Court?

You can take a business partner to court by suing the partner. You may use the business partner for embezzlement, breach of fiduciary duty, fraud, or negligence.

7 Tips for Buying Out a Business Partner

There are many reasons to buy out a business partner, including giving you complete control of the company. The steps for buying out a business partner include: 1) Determining the assets you’re buying, 2) Clear communication, 3) Hire an attorney and CPA, 4) Retain expert in business valuation, 5) Draft a partnership buyout agreement, 6) Determining buyout financing…

What to do if someone breaks a verbal agreement?

If someone breaks a verbal agreement, the first thing to do is to determine if the verbal agreement is valid. If the agreement is valid, hire and lawyer and sue for money damages or specific performance.

How to Register a Business Name in California

To register a business name in California, check if an existing business already uses the name. Then, register the business name with the California Secretary of State if the company is going to be an entity. Register the business's name with the city’s county recorder if the business is not an entity.

Is a Verbal Contract Enforceable in California?

A verbal contract is generally enforceable in California, with some exceptions. Two of several exceptions to enforcing oral contracts are contracts that involve real estate leases, buying or selling real estate.

7 Best Women Business Organizations

For women business owners, it is critical to develop connections with fellow professionals in order to create useful networks. There are plenty of associations that support women, and which can be very beneficial for small business owners looking for advice and fellowship.

5 Unsecured Business Credit Cards for Startups

What is an unsecured business credit card? An unsecured credit card does not require a personal guarantee from the business owner. Small business owners prefer an unsecured credit card.

10 Facts About Business Before Starting A Business

1) More than 50% of new businesses survive their first year in business. 2) Less than 50% of family-owned businesses are passed to their children. 3) 40% of business experience challenges in the supply chain…

Advantages of Buying an Existing Business

Starting a new business is challenging. Buying an existing business has its advantages, including knowing what is already there and improving on it: trained employees, existing customers, and operating expenses.


SBA CAPLines are SBA lines of credit that help a small business improve short-term cash flow. The SBA CAPLines have four types of credit: 1) Seasonal CAPLine, 2) Contract CAPLine, 3) Builders CAPLine, and 4) Working CAPLine.

Deceit Definition | Definition of Fraud

Deceit as defined is tortious fraud or deceit occurs when a party “willfully deceives another with the intent to induce him to alter his position to his injury or risk.” Civ. Code § 1709. Fraud has three meanings: 1) A person made a false promise, 2) A person conceal important facts, and 3) A person intentionally misrepresent an important fact.

Is Small Business Loan Secured or Unsecured

Although a small business loan may be secured or unsecured, nearly always, the loan is secured. The bank loans are nearly always secured by the business’s accounts receivable, intangible assets, and tangible property, if any exists.

5 Steps on How to Build Business Credit with Bad Personal Credit

It is challenging but not impossible to build business credit if an entrepreneur has bad personal credit. A good credit score can set a business up for success. Even if a business owner has a poor personal credit score, he or she should still try to build up their company’s credit score.

3 Advantages of Balance Sheet

The benefits of a balance sheet assist business owners in having an overview of their income, assets, and liabilities. A balance sheet is necessary for lenders to determine how much money to loan a company.

How to Select an Entity Type For A Business

There are many factors when selecting an entity type for a business. Entrepreneurs should consider control, investors or shareholders, taxation, growth, and future needs.

How to Sell on Facebook Marketplace as a Business

Facebook Marketplace is a business service that lists and sells services and products. The marketplace is free for individuals. Businesses pay a 5% fee on services or products sold.

What does principal mean on a loan?

A loan principal is the amount of money that is borrowed. For example, when a bank approves and loans a person or business $100,000, that $100,000 is the loan principal.

What is a micropreneur mean?

Some popular types of micropreneurs include Airbnb hosts, bloggers, life coaches, tutors, and photographers.

Payment Upfront Meaning & 5 Tips for Getting Upfront Payments from Customers

Upfront payments can be beneficial to many small business owners. Upfront payments protect the owner emotionally and financially. There is no fear of customers disappearing without paying for products or services. It is also a great method by which to build trust with customers. It can also help improve cash flow, thereby letting the business grow and flourish.

See all blog: Business | Corporate | Employment

© Copyright | Nakase Law Firm (2019)