Before you enter into a dispute over an oral contract, take a moment to confirm that you have indeed entered into a contract. The difficulty with oral agreements is that it is possible for two parties to be on different sides. In some companies or professions, agreements are often concluded on the basis of oral interviews and/or e-mail correspondence (or may be partly oral and partly written communications). For example, buy orders and buy or sell instructions for stock brokers. Despite their immense intelligence, judges do not have magical powers that allow them to deduce which party is telling the truth in front of them. It is for the parties to the agreement to provide the Court with proof that a contract has been envisaged and actually concluded. This is important for several reasons. First, the courts want to see efforts to resolve disputes without them. Second, alternative dispute resolution (ADR), such as mediation, is generally much less expensive than litigation.

You may think that an agreement has been reached, while the other party may have simply thought that it was an option for the future. If two or more parties reach an agreement without written documentation, they draw up an oral agreement (formally called an oral contract). However, the authority of these oral agreements may constitute a certain grey area for those who are not familiar with contract law. For example, John offered to sell his yacht to Jim, and Jim agreed to buy it – it`s a beautiful boat! John later decided that he did not want to sell the yacht, because of Jim`s frustration when he began to take precautions to buy it. Jim wants to force John to sell the yacht based on his initial agreement. However, the Tribunal would not recognise the contract as a legally binding contract, since not all the terms of the sale have been agreed, such as for example. B the purchase price and other essential goods. If you are entering into an oral agreement, it is a good idea to write down the terms of the agreement in order to try to avoid problems in the broad sense. For further advice, please contact Farleys` Commercial Litigation Department or our Commercial Contracts team on 0845 287 0939 or fill out an application form. Disputes with oral chords can become chaotic and they can be difficult (but not impossible!) to prove. They need supporting documents to prove that a binding agreement has been reached. The problem with oral agreements is that it can be very difficult to prove their existence and to prove what the agreed terms are.

There are also problems with parties who have different memories of what was agreed, or one part may be false about the terms of the oral agreement. There are situations where an oral contract is not enforceable if it comes within the scope of fraud status, which requires written agreement for situations, including: Check your state`s laws or fraud law if you`re not sure whether or not you need a written agreement…