Friends, family members, and trusted co-workers often make verbal agreements. You may feel so comfortable working with another person that you don’t believe a written contract is necessary to protect yourself or your interests.
Sometimes, people choose not to honor spoken agreements. They may break your trust and breach the terms of a verbal contract. However, most people don’t realize oral contracts can be legally binding. Breaching such an agreement can result in legal consequences.
At Arenson Law Group, PC, our legal team wants you to know that you have options. If someone violates the terms of a verbal contract, you may be able to pursue valuable financial compensation.
Can I Sue for Breach of Verbal Contract?
Technically, the answer is yes. Although the agreement is not in writing, you may be able to file a lawsuit if another party breaches a verbal contract. However, many oral contract cases turn into “he said, she said” situations, which can be more challenging to prove than cases with clearly defined terms on paper.
What Is a Verbal Contract?
A verbal contract is a spoken agreement between two parties. Contracts are legally binding agreements outlining the duties or arrangements expected between two parties. Common elements of an oral contract include:
- An offer
- An acceptance of the offer
- Expectations established that both parties are exchanging something for the contract
- What each party is giving up or exchanging has value
- There is mutual consent between the parties
- Each party conducts itself in good faith, and there is no fraud or duress
Verbal contracts are not legally binding if the parties agree to conduct business that violates local, state, or federal law. In other words, the agreement cannot include anything illegal. A verbal contract is not enforceable if the terms are not explicitly specified or if there is a fundamental misunderstanding between the two parties about what the agreement entails.
What Is Breach of Verbal Contract?
Just because a contract is informal doesn’t mean it is unenforceable. Often, people view verbal contracts as lesser agreements, not realizing that oral contracts can be just as valid as written ones. Breach of a verbal contract typically occurs when one party fails to comply with the terms of the arrangement. That may mean failing to buy or sell something. It may also mean a party fails to pay for a provided service or fails to provide the service to a paying customer.
Proving Breach of a Verbal Contract
Although a verbal contract can be legally binding, it is much more difficult to prove a breach of contract without a verifiable paper trail. Breach of verbal contract lawsuits can be challenging, but there are ways to establish the existence of an oral contract and demonstrate how a party failed to live up to their legal obligations. Some of the main elements needed to help prove the validity of a verbal agreement include:
- Witness testimony
- The credibility of both parties
- Course of conduct
Course of conduct is evidence proving an established and accepted history between both parties, forming the basis of the alleged verbal contract. Invoices, proof of money exchanged, proof of payments, and proof of services rendered are all potential examples of course of conduct. Say two people enter a verbal contract involving the sale of a car. If one party can provide proof they made payments to the other party but were not given the car in exchange, that could be an example of course of conduct. The actions of one party can point to the existence of a verbal agreement.
Other information that may help establish the existence and eventual breach of a verbal contract can include:
- Text messages
- Direct correspondence through the mail
Additionally, it is not enough to prove that a valid verbal contract existed and that one party violated it. You must also establish that you suffered financial damages because of the breach of contract.
Gathering the information you need to prove a breach of a verbal contract can be daunting and time-consuming. However, an experienced Iowa attorney can help you understand your legal rights and collect the documentation you need to fight for compensation.
Contact a Cedar Rapids Attorney for Help
Are you concerned about your legal rights following a verbal contract dispute? The legal team at Arenson Law Group, PC can review your situation and advise you of your legal options. We want to help you recover the compensation you deserve. Call our Cedar Rapids office at (319) 363-8199 to set up an initial consultation with a member of our experienced team.