You’ve probably heard the phrase "A handshake deal is as good as a written contract." But is it really true? Can you enforce a verbal agreement in England and Wales? The answer is yes, but there are some important things you need to know before relying solely on a spoken promise.
Let’s break down how verbal agreements work, when they are enforceable, and how to protect yourself in case things go south.
What Makes a Contract Legally Binding?
Before diving into verbal agreements, let’s quickly cover the basics of what makes any contract legally binding. Whether it's in writing or spoken, a contract needs four key elements:
1. Offer – One party offers something (e.g., a service, product, or action).
2. Acceptance – The other party accepts the offer.
3. Consideration – Both parties exchange something of value (this can be money, goods, or services).
4. Intention – Both parties intend to create legal relations (this just means both parties are serious about the deal).
As long as these elements are present, a verbal agreement is just as valid as a written one. However, proving the agreement is where things get tricky.
Are Verbal Agreements Legally Binding?
Yes, verbal agreements are legally binding in England and Wales. In fact, if you’ve got an offer, acceptance, consideration, and intent, you have a legally enforceable contract. But without a written document, proving the terms of the agreement can be a challenge if a dispute arises.
Emails, messages, or witness testimony might help back up the existence of your agreement, but relying on these can be risky. It's always best to follow up with written confirmation, even if it’s just an email summarising the main points of your agreement.
When Do You Need a Written Contract?
Some agreements legally require a written contract to be enforceable. For example:
- Selling or buying land or property.
- Agreements where one party acts as a guarantor for someone else.
These types of contracts cannot be enforced without being put in writing, no matter how much trust exists between the parties.
How to Prove a Verbal Agreement
Let’s say you enter into a verbal agreement, and the other party doesn’t hold up their end. How do you prove it? The difficulty lies in the lack of written evidence. However, here are some ways you could back up your case:
- Emails or Messages: Did you exchange any communications before or after your conversation? If these contain references to your agreement, they could serve as evidence.
- Witnesses: Was anyone present when you made the agreement? Their testimony could help prove that an agreement was made.
- Your Actions: Your behaviour or the other party’s behaviour after making the deal can also act as evidence. For example, if you started providing services based on the agreement, this might indicate that a contract existed.
But remember, proving a verbal contract can be much harder than enforcing a written one, so always aim to get things in writing.
FAQs About Contracts
What types of contracts must be in writing in England and Wales?
Certain contracts, like those related to property sales or leases, or agreements that involve a guarantor, must be in writing to be legally enforceable.
Can verbal agreements be legally binding in a business context?
Yes, as long as the agreement includes offer, acceptance, consideration, and intent, verbal agreements can be legally binding in business. However, written agreements are preferable to avoid disputes.
What happens if one party breaks a verbal agreement?
If one party breaches a verbal contract, the other party can take legal action, but proving the terms of the agreement may be challenging. Evidence like emails, witnesses, or actions taken based on the agreement can help.
Are contracts between marketing agencies and clients better off in writing?
Absolutely. While verbal agreements can technically work, marketing agencies deal with complex deliverables and expectations, making it essential to have everything in writing to ensure both sides are clear on deadlines, payment terms, and the scope of services.
What happens if there’s a dispute over a verbal contract?
Disputes over verbal contracts can be difficult to resolve because both parties may have different recollections of the terms. If it goes to court, you’ll need strong evidence—like witness testimony, emails, or other documentation—to back up your claims.
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In conclusion, while verbal agreements can be legally enforceable, it’s always best to put your agreements in writing. It protects both parties and makes it easier to prove the terms if things go wrong. And if you do find yourself in a verbal contract, follow up with a written summary as soon as possible—it’s a simple step that can save you a lot of hassle down the road.
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