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Are oral contracts legal?

| Mar 22, 2019 | Contract Disputes |

A binding contract is a legal document that holds both parties to their agreement. A contract can be written or oral, which is something many people don’t understand. When you say that you’ll do something and both parties agree, that’s a verbal contract. Certain types of contracts, like real estate contracts, must be in writing, but for other types of contracts, oral agreements can be enough.

It should be clear that written contracts are preferred over oral contracts. Why? They’re easier to prove.

With an oral contract, you only have the word of the parties involved in a dispute. Sometimes, you’ll have witnesses, but even they can be swayed to verify the contract for one person or the other. Oral contracts are difficult to enforce, but it’s possible if that’s all you have.

What happens when a contract is breached?

When there is a breach of contract, it gives one party the right to sue the other to enforce the contract. The party that is suing might ask for the contract to be fulfilled or for the other party to provide compensation to them for losses. You need to file a lawsuit within five years of a written contract or four years of an oral contract if you plan to sue as a result of a breach of contract.

If you have an oral contract with a vendor or other party, it’s a wise choice to ask for a written contract as soon as possible. Both of you will benefit from a written agreement that you can review in the future.