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Is a verbal agreement legally binding?

A verbal agreement can be legally binding if it creates an "oral contract" in law. If you offer to sell a computer to your friend for £130, and your friend agrees, you have created an oral contract. If your friend only pays you £65, he has breached the contract, and you can take him to court, but you will need to prove that you both agreed to a price of £130, and that you satisfied any other terms.


According to Jeffrey A. Helewitz in "Basic Contract Law for Paralegals," the following elements must be present in a valid, enforceable contract, whether oral or written:

  1. Offer
  2. Acceptance
  3. Consideration (something of value, such as goods or money)
  4. Permissible subject matter (contracts for illegal acts, for instance, are not enforceable)
  5. Legal age and mental ability to enter into a contract ("capacity")
  6. Intent to form a contract


According to the American Bar Association Family Law Guide, most states require that certain contracts be in writing, including property agreements, payment of another person's debts, and contracts for over £325.


Although oral contracts are legally binding, you may have difficulty proving that the contract actually exists. In court, you must establish that an agreement took place, and what terms were involved.


If a party does not fulfil its duties or obligations, the contract has been breached, and the other party may go to court to enforce the contract. In a typical breach of contract case, one party will argue that it met all the contract's requirements, but the other party did not, or that the item or goods at the centre of the dispute were actually a gift.


When forming a contract, include all provisions, such as time limits, terms of payment, and what happens if the contract is breached. If possible, get the agreement in writing, and have all parties sign. For complex agreements, or if you have questions about a contract, consult an attorney.