A verbal contract, also known as an oral contract, is an agreement between parties that they create through spoken communication rather than written documentation. Verbal contracts are common in many everyday transactions and can be legally binding in Oklahoma under certain conditions. However, proving the terms and existence of a verbal contract can be challenging.
Definition of a Verbal Contract
A verbal contract is formed when two or more parties agree to certain terms through spoken words. For a verbal contract to be valid and enforceable, it must meet the same basic requirements as a written contract:
- Offer and Acceptance: One party must make an offer, and the other party must accept it.
- Consideration: There must be something of value between the parties, such as goods, services, or money.
- Mutual Intent: Both parties must intend to create a binding agreement.
- Capacity: The parties must have the legal capacity to enter into a contract, meaning they are of legal age and sound mind.
- Legality: The contract’s subject matter must be legal.
If it meets all of these criteria, then the contract is valid.
Enforceability of Verbal Contracts in Oklahoma
In Oklahoma, verbal contracts can be enforceable, but certain conditions and exceptions apply:
Statute of Frauds: The Statute of Frauds requires certain types of contracts to be in writing to be enforceable. In Oklahoma, the following contracts typically must be in writing:
- Contracts for the sale of real estate.
- Contracts that you cannot perform within one year.
- Contracts for the sale of goods over $500 (as per the Uniform Commercial Code).
- Contracts involving marriage or prenuptial agreements.
- Contracts to pay someone else’s debt.
Proof of Agreement: Proving the existence and terms of a verbal contract can be difficult. This is especially true in construction contracts or sales contracts. Courts often rely on evidence such as witness testimony, actions of the parties, and other circumstantial evidence to determine if a verbal contract existed and what its terms were.
Reasonableness: To enforce a verbal contract, it must be clear that the parties reached a mutual understanding on essential terms. The agreement must be specific enough that a court can determine the obligations of each party.
Partial Performance: If one party partially performs their obligations, this can serve as evidence of the contract’s existence and terms.
Knowing the specific criteria that your contract must meet, and if it must be written, can help you avoid potential legal issues.
Challenges with a Verbal Contract
However, due to their verbal nature, these contracts do come with some challenges:
- Lack of Clarity: Verbal agreements can often be vague or incomplete, leading to misunderstandings or disputes over the exact terms.
- Proof of Terms: Without written documentation, it can be challenging to prove what was agreed upon, making enforcement in court more difficult.
- Statute of Limitations: The time limit for bringing a lawsuit to enforce a verbal contract in Oklahoma is generally three years from the date of the breach.
Because of these, many will agree that a written contract is best, just to avoid potential disputes and have proof of the agreement.
Wagoner County Contract Attorneys
In conclusion, verbal contracts can be enforceable in Oklahoma, provided they meet the basic requirements of a contract and are not subject to the Statute of Frauds, which mandates certain agreements to be in writing. While verbal agreements are legal, proving their existence and terms can be challenging. Therefore, it is generally advisable to put agreements in writing to avoid potential disputes and provide clear evidence of the contractual terms. Consulting with a business law attorney helps ensure that your contracts are valid and enforceable.
Luckily, our team here at Wagoner County Attorneys is comprised of skilled contract attorneys who can help you through the process and ensure enforceability. If you need help, reach out to us at 918-283-7394 or ask a question online.
