A verbal agreement was made – what does it mean?
In business, contracts and agreements are essential to ensure that all parties involved are on the same page. However, not all agreements are in writing, and sometimes a verbal agreement can be just as binding.
A verbal agreement is an agreement that is made orally, without any written documentation. It can be made between two individuals or between a group of people, and it can be legally binding if certain conditions are met. The key to a verbal agreement is that both parties agree to the terms and conditions that are being discussed.
One important thing to note is that verbal agreements can be harder to enforce, compared to written agreements. This is because written agreements provide a clear record of what was agreed upon, whereas with verbal agreements, it can be a case of “he said, she said.” However, a verbal agreement can still be legally binding under certain circumstances.
For instance, a verbal agreement can be enforceable if it satisfies the elements of a contract. This includes an offer, acceptance, and consideration. An offer is made when one party proposes the terms of the agreement. Acceptance is made when the other party agrees to the terms of the agreement. And, consideration is the benefit or something of value that both parties agree to exchange.
One example of a verbal agreement that is legally binding is when a contractor agrees to perform a service for a homeowner for a specific amount of money. If both parties agree to the terms and conditions and the contractor provides the services, then a verbal agreement has been made, and the homeowner is legally obligated to pay the contractor.
In conclusion, while it is always recommended to have written agreements in place for clarity and enforceability, a verbal agreement can still be binding under certain circumstances. As a general rule, it is best to document agreements, particularly if the amount of money involved is significant. However, if a verbal agreement is made, it is important for both parties to understand what was agreed upon and keep records of the conversations and agreements made.