A verbal agreement, also known as an oral contract, is a legal agreement made between two or more parties without any written documentation or written expression. It is a common form of agreement in many business transactions and personal relationships.
Verbal agreements can be made in various contexts, such as employment agreements, sale of goods, service agreements, and leases. They are valid in law just like written agreements, provided that they meet the essential requirements of a legal contract. These requirements include an offer, acceptance, consideration, and an intention to create legal relations.
Although verbal agreements are legally binding in most cases, they can be difficult to enforce or prove in court. This is because there is no tangible evidence of the terms of the agreement, which can lead to disputes over the terms and conditions of the agreement.
In some cases, verbal agreements are not enforceable under the law. For instance, some types of contracts, such as contracts for the sale of land or contracts that cannot be performed within a year, must be in writing to be enforceable under the statute of frauds.
To reduce the risk of disputes or misunderstandings, it is advisable to have a written contract that clearly outlines the terms and conditions of the agreement. However, if a verbal agreement has been made, it is important to keep records of any communications, emails, or messages related to the agreement. This can help to prove the existence and terms of the verbal agreement in case of a dispute.
In conclusion, a verbal agreement is a legal agreement made between two or more parties without any written documentation. Verbal agreements are valid in law provided that they meet the essential requirements of a legal contract. However, it is advisable to have a written contract to reduce the risk of disputes or misunderstandings.