Can a verbal promise constitute a contract?

On Behalf of | Oct 2, 2023 | Business Law |

A lot of small businesses forego formalities when engaging in transactions. To them, doing so is easier, faster, and builds trust-based relationships. But bypassing a written contract can land you in trouble. Although you might rely on the strength of someone’s word to do business, without a written instrument commemorating that agreement, you could be left in a position where you’ll have to argue that the verbal promise is legally binding.

Can a verbal promise constitute a binding legal contract?

Yes, in some instances. In order to prove that a verbal promise is a legal contract, you’ll have to address several factors. This includes:

  • An actual offer was made, and that offer isn’t so preposterous as to be unrealistic. In other words, an ordinary person in your position would presume the offer to be real.
  • The offer was accepted, which means that you agreed to give something in return for the offer.
  • You relied on that offer to your detriment, which may mean that you passed over other business opportunities that could’ve benefitted your or you otherwise lost money by relying on the verbal promise.

How do you prove that a contract existed?

Much of your evidence is going to come from your written communications with the other party and witness testimony. Intent is key here, so anything that shows what the other side intended out of the offer and your response will be key. Your history of dealing with the other side can be pivotal, too, such as if you’ve regularly contacted business transactions by verbal agreement, in which instance a future verbal agreement will likely also be deemed enforceable.

Are you ready to advocate to protect your interests?

If so, then you need to educate yourself on the law and what it takes to build a successful case. That might be stressful to think about, but by taking deliberate legal action, you can protect your interests and hopefully secure the outcome that’s best for you.



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