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Is a Verbal Agreement

Is a Verbal Agreement Legally Binding? A Guide for Business Owners

As a business owner, it`s important to understand the legal implications of the agreements you make. One common question that arises is whether a verbal agreement is legally binding. The short answer is yes, but there are some important caveats to keep in mind.

What is a Verbal Agreement?

A verbal agreement is an agreement made between two or more parties without any written documentation. It can be as simple as a conversation between two people or as complex as a formal contract negotiated verbally.

Are Verbal Agreements Legally Binding?

Yes, verbal agreements are legally binding in most cases. However, proving the terms of a verbal agreement can be difficult without written evidence. In some situations, verbal agreements may not be enforceable if they violate certain laws or public policy.

The Statute of Frauds

One important consideration for business owners is the Statute of Frauds. This law requires that certain types of contracts must be in writing to be legally enforceable. These include contracts for the sale of goods over a certain value, contracts lasting longer than one year, and contracts involving real estate.

If your verbal agreement falls under one of these categories, it may not be legally binding. It`s important to consult with a lawyer to ensure that your agreements meet the legal requirements.

Proving a Verbal Agreement

If you do have a verbal agreement that falls outside of the Statute of Frauds, you may still need to prove its terms in court. This can be difficult without written evidence, but there are some steps you can take to strengthen your case:

1. Document the agreement: Whenever possible, follow up on your verbal agreements with written confirmation. This can include emails, text messages, or even handwritten notes. These documents can serve as evidence of what was agreed upon.

2. Get witnesses: If there were other people present when the agreement was made, they can serve as witnesses in court. Be sure to get contact information for these witnesses in case you need to call on them later.

3. Keep a paper trail: Even if there is no written agreement, keep a record of any payments or other actions taken in accordance with the verbal agreement. This can help establish its existence and terms.


Verbal agreements can be legally binding, but they come with some risks. It`s important to understand the legal requirements for your specific situation and take steps to document and prove your agreements. A good lawyer can help you navigate these issues and protect your interests.