- Posted August 31, 2014 by
San Diego, California
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A Verbal Agreement is a Contract Too; But a Written Agreement is Still Better
How does someone prove an agreement exists if the agreement was made verbally?
The short answer is: other writings and partial performance. With the advent of text messages and emails, people often send messages that form a bigger picture when put into context. After an in-person meeting, one party may text the other: "So glad we reached an agreement this afternoon!" This type of messages supports the existence of an agreement, which is sometimes in dispute.
Partial performance exists when a person actually does something that would usually only be done in exchange for something else – usually payment. If a painter paints a home, it can be reasonably inferred that the homeowner promised to pay something in return. Without a written agreement, the painter may not be paid exactly what was promised, but at least he can recoup the fair value of his efforts.
Ms. Burd also stated, "A client can enforce their verbal agreement, but the case is usually much easier when the contract is written. Ideally, an attorney can get to the client before a dispute arises and can reduce that verbal agreement to writing as soon as possible. Terms can be inserted to help the parties avoid court if a disagreement arises."
Here are some reasons why written contracts are better:
•Clarity. Verbal agreements are generally vague and ambiguous. Individuals often define terms differently. Most importantly, people frequently forget or misremember the details.
•Evidence. A contract is a person's best evidence of what both parties actually promised to do or not do. Even when all parties are acting in good faith, sometimes people remember wrong. Having the ability to refer to terms in writing can save all parties in time and resources by avoiding unnecessary arguments.
•Statute of limitations. If someone breaks a written promise to another, they have four years from the date of the broken promise to bring a lawsuit. In contrast, one only has two years to bring an action on a broken verbal agreement.
Finally, it is important to remember that sometimes an agreement is required to be in writing. Common example are: an agreement for performance when the performance is to take place after one year; for the sale of a property or a lease exceeding one year; an agreement not to be performed within the lifetime of the promisor; and a loan exceeding $100,000.00. These exemptions make sense because they involve large quantities of money and significant assets.
While it is important to know that verbal agreements are enforceable, it is even more important to understand the benefits, and sometimes necessity, of putting an agreement in writing.