Oral Agreement

Definition

An oral agreement is a contract made in words that are not reduced to writing. While enforceable, the standards of proof for oral agreements vary by jurisdiction.

Purpose

Oral agreements are used to form contracts where written documentation is not available or deemed unnecessary. They rely on mutual understanding and verbal communication between parties.

Examples of Use

• Informal Transactions: Agreements between friends or family members for lending money or sharing responsibilities.
• Business Deals: Verbal contracts for small business transactions or services.
• Employment: Verbal job offers and acceptances, especially in informal work arrangements.

Related Terms

• Written Contract: A contract that is documented in writing and signed by the parties involved.
• Implied Contract: A contract formed by the behavior and circumstances of the parties, rather than written or spoken words.
• Statute of Frauds: A legal principle requiring certain types of contracts to be in writing to be enforceable.

Notes

• Proof: Proving the terms of an oral agreement can be challenging without witnesses or supporting evidence.
• Enforceability: The enforceability of oral agreements depends on the nature of the agreement and jurisdictional laws.