Verbal Contract Meaning: Understanding the Basics
A verbal contract is an agreement between two or more parties made through spoken communication, rather than in writing. These types of agreements are legally binding, provided that all the legal requirements are met.
There are two types of verbal contracts-oral and implied. An oral contract is one in which the terms are explicitly stated and agreed upon by both parties. An implied or “tacit” agreement is one where the terms of the contract are not verbally stated, but rather implied by the actions or conduct of the parties involved.
In order for a verbal contract to be legally enforceable, there are some requirements that must be met. Firstly, the terms and conditions of the agreement must be clear and unambiguous. Both parties must agree on these terms, and there must be a mutual understanding of what each party shall do in accordance with the agreement.
Secondly, there must be an offer and acceptance of the terms of the agreement. This means that one party must offer something of value to the other, and the other party must accept this offer. Consideration is another requirement for a verbal contract; this means that both parties must receive something of value in exchange for their agreement.
One of the most important things to keep in mind when entering into a verbal contract is that it can be difficult to prove its existence. Unlike a written contract, there is no physical document outlining the terms of the agreement. It becomes a matter of “he said, she said,” which can be difficult to prove in court.
To avoid any misunderstandings or disputes, it`s always best to put agreements in writing. Written contracts are easier to enforce because the terms are clearly defined and legally binding. In addition, written contracts can help to clarify any misunderstandings or disagreements that may arise.
In conclusion, a verbal contract is a legally binding agreement made through spoken communication, provided that all the legal requirements are met. Before entering into a verbal contract, it`s important to understand the requirements and the potential risks involved. Whenever possible, it`s strongly recommended to put agreements in writing to avoid any misunderstandings and to make the enforcement of the agreement easier.