Is a Verbal Agreement Legally Binding in California?

Posted on by datateam

When you enter into a contract with someone, you and the other party both have a legal responsibility to uphold each side of the deal. In a written contract, the details and provisions of the agreement are set in stone based on the language of the contract. In a verbal or oral agreement, the terms might not be as clear-cut. It is generally more difficult to enforce a verbal agreement in California. However, they are still legally binding in most situations.

Unique Complications Behind Verbal Agreements

Verbal agreements are in more of a gray area than written agreements. In a written contract, each party’s duties, responsibilities, and stakes are literally in black and white writing. Enforcing a verbal contract, however, is difficult due to a lot of he-said, she-said. It is hard for the courts to make a determination based on each party’s recollection of the agreement, rather than a hard copy. Enforcing a verbal agreement will take showing some proof that the oral contract existed, and that the other party breached his or her side of the deal.

Certain types of contracts have to be in writing for them to be legally binding. Contracts for an amount of goods valued over $500 must be in writing, according to the statute of frauds. California state law may also impose requirements for written contracts for some types of agreements. Typically, you cannot have a legally binding verbal lease of land, contract that will take longer than a year to fulfill, contract promising to satisfy someone else’s debts, or marriage contract. State law requires these types of agreements to be in writing for the courts to enforce them, in most cases.

Verbal agreements also have unique statutes of limitations compared to written contracts. If you wish to file a claim against someone for an alleged breach of a verbal agreement, you will have a shorter amount of time to do so. Make sure to learn your statute of limitations for bringing a contract dispute claim according to your type of agreement.

If you made a verbal agreement with someone after an injury or accident, consult a local accident attorney. During a free consultation you can ask about your options and what you can do if someone broke a verbal agreement.

How to Make a Legally Binding Verbal Agreement

If you plan on entering into an agreement with another party, do so in writing to protect yourself from potential breaches or contract disputes in the future. If for some reason you cannot get the contract in writing, you can at least take certain steps to optimize the odds of creating a valid and legally enforceable verbal agreement in California.

  • Offer and acceptance: Make sure the agreement has both. One party must propose an agreement and the other must accept its terms.
  • Fair consideration: Both parties in the agreement must exchange something for the contract – something of actual value.
  • Meeting of the minds: A verbal contract must be a meeting of the minds; in other words, both parties must mutually assent to its terms.
  • Valid circumstances: No court will uphold a contract if one of the parties was mentally incapacitated, a minor, or under duress at the time of its creation.
  • Key terms: Make your agreement as clear in its key terms as possible. The courts will need to understand its key terms to enforce them, rather than dealing with hearsay. Its terms must be definite and unambiguous.
  • Protect yourself by keeping some proof of the verbal agreement: This could be paystubs, invoices, or services performed in accordance with the oral contract.

It is in your best interests to translate a verbal agreement into a written contract in California. A written contract is much easier to enforce in a courtroom setting. At the very least, create and keep written communications between yourself and the other party that talk about the verbal agreement you have. Working with an attorney to create any type of contract can protect you from disputes in the future.