A verbal agreement is a type of contract that is made orally and not in writing. Parties to a verbal agreement enter into a legally binding contract by agreeing to perform certain obligations. However, it is important to know that verbal agreements can be harder to enforce than written agreements because there is no physical evidence of the agreement.
When two or more parties enter into a verbal agreement, it is important to clearly outline the terms of the agreement, including what each party is responsible for. This includes the performance of certain obligations, the timeline for completion, and any other specific details that are pertinent to the agreement.
The parties must also agree on the consideration for the agreement. Consideration is something of value exchanged between the parties, such as money, goods, or services. Without consideration, there can be no legally binding contract.
In some cases, it may be necessary to put the terms of the verbal agreement in writing to ensure that both parties fully understand the agreement. You can draft a simple contract to document the agreement and have both parties sign it. This will help prevent any misunderstandings or disputes that might arise in the future.
It is important to keep in mind that verbal agreements are not always legally binding. Some agreements require written documentation or a signature to be enforceable. For example, real estate transactions usually require a written agreement, and a contract for the sale of goods typically requires a signature. If the terms of the verbal agreement are unclear or ambiguous, it may be difficult to enforce in court.
To summarize, when parties enter into a verbal agreement, they should clearly outline the terms of the agreement, including what each party is responsible for, the timeline for completion, and any specific details that are pertinent to the agreement. Consideration must be exchanged, and it is sometimes necessary to put the terms in writing to ensure the agreement is legally binding. Overall, it is important to be diligent when entering into a verbal agreement to ensure that both parties fully understand the terms and conditions of the agreement.