What is the Legal Value of a Verbal Agreement?

Often, business deals are concluded without a formal agreement. You might shake hands over a coffee, agree to terms during a quick phone call, or confirm something in a meeting. Whilst it may hold value at the time, it is worth wondering how legally binding a verbal agreement is.

Is Verbal Agreement Legally Binding?

A verbal agreement is any contract that isn’t in writing. In the UK, these agreements can be legally binding. However, it is often difficult to prove any wrongdoing. Without any written record, disputes can quickly turn into a “he said, she said” situation.

What Makes a Verbal Agreement Enforceable?

For a verbal deal to hold any legal weight, there are a few key things to keep in mind. Both parties must genuinely intend the agreement to be more than a casual promise. It requires a clear offer from one of the parties and an acceptance from the other.

Both sides must get something of value, whether it’s money, services, or a commitment to act. It means the terms of the agreement must be as clear as possible because vague promises are hard to defend in court.

In many instances, the law stipulates that the contract must be in writing. This is the case of employment contracts, property deals, and long-term leases.

Why You Should Be Careful

Even if you trust the other party completely, relying solely on verbal agreements carries risk. Without evidence, it is difficult to prove a deal existed, and this can result in expensive legal battles.

Whenever possible, try to put agreements in writing. Even a short email summarising the discussion can make all the difference if a disagreement arises later.

For a verbal contract to be more binding, we advise taking precautionary action. Keeping notes of the discussion and ensuring the parties agree on key points helps to serve as a reminder of the agreed terms. Moreover, doing this is particularly useful if, for some reason, you must prove responsibility.

Finally, if you’re unsure about the enforceability of a deal, get advice from a professional. Eatons Solicitors specialise in helping business owners make sure all verbal and written agreements protect their interests and remain legally enforceable.

Protect Your Business

A verbal agreement is legally binding in the right circumstances. However, it is often difficult to enforce.

It is always safer for business owners to confirm key points in writing. A documented deal clearly outlines the responsibilities of each party involved. This means a written agreement is always a safer choice.

That handshake may feel enough in the moment, but a little extra effort now can save a lot of headaches down the road. For advice surrounding contracts, we advise you contact Eatons Solicitors or visit our offices in Bradford, Bingley, and Yeadon.