Verbal Contracts; Are They Legally Binding?

Let’s talk about verbal contracts. I hope that businesses would always have written contracts in place, but you never know, there’s always one.

When you think of verbal contracts, you’re probably wondering to yourself  ”are they legally binding like a written contract is?’’

It’s widely assumed that verbal agreements are not valid, but this isn’t the case. Let’s dive in and find out…

What is a verbal contract?

A verbal contract is a contract that is made verbally or orally. It is an agreement between two or more people that is made in person or over the phone. Just like physical written contracts, verbal contracts ARE legally binding.

However, this doesn’t mean that any conversation consisting of something you’ve agreed to can be interpreted as a verbal agreement. But you need to be aware of the requirements of a verbal agreement.

Will a verbal agreement hold up in court?

The simple answer is yes. They will hold up in a court of law, as long as both parties have agreed to all conditions.

What must a verbal agreement include?

1.       An Offer

For example; You’re an accountant and you have proposed an hour of accounting services for £100 per month

2.       An Acceptance

The offer is accepted by the business owner that wants accounting services

3.       Consideration

This means that a service or a physical thing must be exchanged between the two parties involved

4.       Legal Intention and Contractual Capacity

Both parties must be aware and understand that the verbal exchange is a legally binding contract.

Now that we know verbal contracts are legally binding and will hold up in a court of law, what’s to stop someone from denying that a verbal contract ever existed if a dispute did arise?

This can be a tricky one. Verbal contracts are legally binding, but you must be able to prove that they exist. This means that any invoices or payments that were made can be used and any witnesses or people that we’re involved in the agreement can be called on for a witness statement. Emails referring to the verbal agreement can also be used as evidence.

The problem with verbal agreements is that if you don’t have evidence to back it up, it can be very difficult to prove.

The moral of the story is; always have a written contract in place.

Get a solicitor to review your contract to make sure that you’re fully protected. It can and will save you a great deal of hassle.


Get in touch today to see if we can help you with your written contracts –

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