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The Law & Verbal Agreements

By: Garry Crystal - Updated: 21 Jul 2017 | comments*Discuss
 
Verbal Agreements Legal Binding

Many people are not aware that verbal agreements are in many cases as legally binding as written contracts. Verbal contracts can be upheld by a court if someone decides to breach the agreement, although without written terms and conditions it may be difficult to prove.

Conditions of a Verbal Agreement

Under law there are two basic terms that constitute a binding agreement. The verbal agreement will be binding if there was an agreement on the services to be performed and an agreement was reached on remuneration for this service. This agreement can be reached by a verbal exchange in person, via telephone or via an email.

There are certain contracts and agreements that must be made in writing and these will include the sale of property, tenancy agreements, copyright transfer, and contracts for consumer credit. In some cases, verbal agreements will not be upheld in court, not because of the lack of a written agreement but because the terms of the verbal agreement were not clarified.

Written Agreements

For any agreement concerning an exchange of services it is a wise idea to have some form of contract or written statement. The contract or statement should include the terms and conditions of the agreement and is particularly helpful if a dispute between the parties occurs.

Complete Verbal Agreements

In order for a verbal agreement to be legally binding the agreement must have reached completeness. This means that all terms and conditions have been reached and agreed regarding services and terms of pay. Agreements will be incomplete when there are still further terms and conditions to be agreed. Agreements in principle will not usually be upheld in court and will not usually be considered complete verbal agreements.

Verbal Agreements and Disputes

If either party has decided to break a contract then the matter can be taken to the legal courts. In most cases the dispute may rest on the justification of the terms of the verbal agreement. There are a few ways that a judge will try and establish the terms of the agreement. These could include investigating what actually happened in practice. This can include the services that were actually undertaken and if any money whatsoever was paid for any services.

Enforcing a Verbal Agreement

Apart from taking the matter to court there are other ways to enforce a verbal agreement. If money is owed then the matter can be passed on to a collection agency to try to enforce the matter for you. The disgruntled party can also apply pressure themselves by sending letter, emails and making telephone calls to the person who is in breach of contract. Copies of all emails and letters should be kept in case the matter does reach the law courts.

Payment before Service

One way of avoiding this sort of dispute ever occurring may be to ask for some form of payment before supplying a service. Although the customer may not always agree to this it may be an option to consider. In some cases if a person is going to breach a contract and withhold payment then the odds are they may never have intended to pay for the service in the first place. In many cases though a customer may not like the idea of paying for a service until the job is completed for fear of non completion.

Threatening court action for breach of a verbal contract may not actually help the matter at all if one party intended not to carry through on the agreement. However the law does consider complete verbal agreements as Legally Binding and the matter can be brought to the law courts for a judge to make the final decision.

One interesting question is 'does a text message create a legally binding contract?'. Richard Brittle of Brittle Motors based in Stoke-on-Trent believes that it does. Over the coming weeks our leading in-house barrister will report on her findings which should make for interesting reading.

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[Add a Comment]
@Tina - not if it was verbal. Even if it wasn't verbal and was written - there is still nothing much you can do as it was your decision to sell the house.
Charlie - 21-Jul-17 @ 2:53 PM
Babydove - Your Question:
If you have a verbal contract with someone who has lent you money.and after a few payments have been struggling to repay and told the said person, to which they reply by txt message to your phone, forget it, I don't want it back, is this still a legal verbal contract and can they change their mind to want payment again at a later date?

Our Response:
The person can change their mind. But, if you have this text as proof and they wish to take you to the small claims court, then this can be used as evidence from your part. Therefore, if you think the person may change their mind, it is important you keep this text.
ContractsAndAgreements - 21-Jul-17 @ 2:13 PM
Hi I was verbally promised my old job back from the manager, I put my house up for sale,relocated and found a rental near where the job would be. I sent the manager an email stating that before I put my house up for sale would I definitely get the job. I had a reply verbally over the phone. My ex co worker was also involved and liaison between both of us, I have texts messages that I could use as proof? The manager then changed her mind and decided to give the job to her daughter in law. It was too late to pull out of the house sale by then. Is there anything I can do legally? Thanks
Tina - 21-Jul-17 @ 1:43 PM
If you have a verbal contract with someone who has lent you money....and after a few payments have been struggling to repay and told the said person, to which they reply by txt message to your phone, forget it, I don't want it back, is this still a legal verbal contract and can they change their mind to want payment again at a later date?
Babydove - 21-Jul-17 @ 9:31 AM
Hi, I had a verbal agreement, confirmed in a text message, with my hairdresser to do my daughter's hair on her wedding day as well as her three bridesmaids and my hair too. Last night she sent a text saying she was cancelling all future appointments (including the wedding) with less than 3 weeks to go before the Big Day. I have already paid her £40 for my daughter's hair trial. Can she legally do this at such a LATE stage which threatens to completely ruin the most important day of my daughter's life?
Babs - 16-Jul-17 @ 10:28 PM
Mike - Your Question:
Our family booked the whole field of a caravan site for a 60th birthday party with a live band. The verbal agreement was made to pay £560.00 for the w/e. When we arrived with all our family and friends the site owner had allowed 4 tents to be erected at one end of the site for his friends to stay in. We informed the site owner of our displeasure but he made no effort to explain why he had allowed this and said it was to late to ask them to move. On the first evening the site owners friends got into an argument over their 4 dogs which had let run freely around the site. They become aggressive and it took some time to settle things down. The next day we informed the remaining members of the party who were due to arrive for the party and live band of the situation and most of them decided to stay away.We scaled back the celebrations with the remaining family and guest and started to pack up to leave. We approached the owner and requested a reduced settlement for the rental of the field. He then turned very aggressive and demanded the full payment within 20 minuets or he was calling the police. He then blocked the exit with his van and informed us he would be clamping our vehicles. As we had lots of young children in the group and did not wish have any escalation, so we paid the full amount and left the site. Is their any way we can claim recompense for the site owner breaking the verbal contract.

Our Response:
Was it a private agreement or booked through a company? Resolver here can give helpful tips and advice, even if the company is not part of its list. The CAB also has a letter of complaint template that you could use in the first instance here. If the owners are part of the Caravan and Motorhome Club, please see link here. If was a loose/informal verbal agreement and you feel the agreement was breached and your letter of complaint is ignored, then your only option to recover all or part of the money would be to try through the small claims court.
ContractsAndAgreements - 14-Jul-17 @ 10:52 AM
Our family booked the whole field of a caravan site for a 60th birthday party with a live band. The verbal agreement was made to pay £560.00 for the w/e. When we arrived with all our family and friends the site owner had allowed 4 tents to be erected at one end of the site for his friends to stay in. We informed the site owner of our displeasure but he made no effort to explain why he had allowed this and said it was to late to ask them to move. On the first evening the site owners friends got into an argument over their 4 dogs which had let run freely around the site. They become aggressive and it took some time to settle things down. The next day we informed the remaining members of the party who were due to arrive for the party and live band of the situation and most of them decided to stay away. We scaled back the celebrations with the remaining family and guest and started to pack up to leave. We approached the owner and requested a reduced settlement for the rental of the field. He then turned very aggressive and demanded the full payment within 20 minuets or he was calling the police. He then blocked the exit with his van and informed us he would be clamping our vehicles. As we had lots of young children in the group and did not wish have any escalation, so we paid the full amount and left the site. Is their any way we can claim recompense for the site owner breaking the verbal contract.
Mike - 13-Jul-17 @ 1:15 PM
I own a window cleaning business that's part of a franchise. My partner and I never really discussed logistics of the business i.e. When and where, nothing was ever signed or drawn up. No agreemensts out side of where I would do it and how he would be paid. I want out and was wondering if it would be as a easy as just saying it. I also want to start my own business in the same field. Help...
Denisemnts - 9-Jul-17 @ 5:27 AM
I made an offer on a property in early June 17. The estate agent recommended both surveyor and solicitor. The solicitor emailed me a list of services and prices, which I agreed to. The surveyor called me and offered a home owners survey for around 500gbp which would be carried out on the 22nd via collecting keys from the estate agents. I verbally agreed to this depending on completion of sale. On the 16th I withdrew from the purchase after being Gazumped twice. I contacted the solicitor and told them I did not need further services. On the 17th I received a letter and invoice from the surveyor asking for written confirmation to carry out the survey. I didn't return the form because I was no longer purchasing. Now the surveyor is asking for the 500gbp as they have completed the survey. 1. Why would the estate agents give authorization for the survey when they knew I had withdrawn? 2. Why would the surveyor complete it without contacting me to confirm? 3. Do I have to pay the fees?
Shay - 7-Jul-17 @ 5:14 PM
We recently moved home and agreed with the sellers that in return for us paying full asking price they would pay our stamp duty.This helped us complete the sales and raise sufficient funds.The mortgage company we used would not process this through the completion process and so we had to broker a verbal agreement through the estate agents so that we could all complete and not delay the chain further.The alternative was to try a different lender but this would've led to further delays which was not in the interests of any party.It was agreed that we would pay the stamp duty and following completion private contact details would be exchange so the money could be paid privately.This was always a condition of sale and we have paperwork to support this. Do we have a case if we were to take this to court.The seller has moved out the area and has not returned any communication.
Kev - 7-Jul-17 @ 4:14 PM
GW - Your Question:
I have a verbal agreement with my emplyer about working for him. he payed me once as in the part of the verbal agreement then stopped paying me. after 4months of working my employer stepped down amd let his brother take over the busness. I once again had a verbal agreement with the brother to carry on working and in the verbal agreement meeting I took notes down. they now owe me in total of R9200. we had another meeting about what is owed to me and came to an agreement witch I have on recording. but now the brother that took over the busniss is saying hes not gana give me wat is owed to me before he took over.am I able to sue them or not ?

Our Response:
As we are a UK-based site with knowledge of only UK-based laws we cannot advise. You would have to take legal advice in your own country in order to explore your options.
ContractsAndAgreements - 4-Jul-17 @ 10:22 AM
i have a verbal agreement with my emplyer about working for him. he payed me once as in the part of the verbal agreement then stopped paying me. after 4months of working my employer stepped down amd let his brother take over the busness. i once again had a verbal agreement with the brother to carry on working and in the verbal agreement meeting i took notes down. they now owe me in total of R9200. we had another meeting about what is owed to me and came to an agreement witch i have on recording. but now the brother that took over the busniss is saying hes not gana give me wat is owed to me before he took over....am i able to sue them or not ?
GW - 3-Jul-17 @ 11:48 AM
John - Your Question:
I loaned my nephew and his wife money to pay off their overdrafts on a verbal understanding that it was to be repaid when their financial position improved as it now has, substantially (foreign holidays, house improvements, buying a new house, upgrade of car, work promotion etc). Two repayments were made then then stopped.Does the fact that repayments were made prove acknowledgement that it was a loan and do I have a chance of recovery of the debt via Small Claims Court?Thanks

Our Response:
Yes, the more evidence you have to be able to prove your nephew and his wife agreed to pay the money back, it will help your case. You may wish to seek some legal advice before you make a claim, just to ensure you have a case to answer.
ContractsAndAgreements - 27-Jun-17 @ 2:45 PM
I loaned my nephew and his wife money to pay off their overdrafts on a verbal understanding that it was to be repaid when their financial position improved as it now has, substantially (foreign holidays, house improvements, buying a new house, upgrade of car, work promotion etc).Two repayments were made then then stopped. Does the fact that repayments were made prove acknowledgement that it was a loan and do I have a chance of recovery of the debt via Small Claims Court? Thanks
John - 26-Jun-17 @ 8:30 PM
@Leon - it is always better to get an agreement in writing. If you have a verbal agreement it is based on trust that your employer will not change their mind. That said, even if you have a written agreement situations can change and your employer could come up with some financial excuse or other to renege on the agreement if they so choose. Fee.
FN78 - 26-Jun-17 @ 10:03 AM
I had made a verbal agreement with my employer in a meeting, that if I was to relocate to a department that I would be given study support to the current company policy. Would this still be seen as a binding verbal contract?
Leon - 23-Jun-17 @ 6:53 AM
My partner and me are moving to a different country in September. We are renting a 1 bedroom flat and furnished it. We either wanted to take all furniture with us or offered the landlord to purchase everything so that he can rent it furnished. After inspection of the furniture by the agent, they were happy and a verbal agreement was made of £600. I demanded something in writing but was told to deduct the money from our last rent. I also informed the agent that I will now proceed with the moving company for the remaining items we have and that this is safe and he agreed. This was in May. After a viewing yesterday (19th of June) the agent has decided to offer the place to the new tenant for September. The new tenant however does not need furniture and I was informed today that for this reason the furniture is not needed anymore. This obviously leaves us in a bad situation as I have already paid the moving company, which does not include the furniture. Selling everything separately will also be challenging due to a lack of time as we are both very busy. All those aspects are known to the agent. From my point of view, the agreement described the condition of the furniture and not a suitable tenant. His argument is that the tenant seems to be most suitable and that is why he is going to go ahead, even though there is enough time to find someone until September. I have also messages confirming the agreement made initially.
Tenant - 20-Jun-17 @ 10:36 PM
Please advise how much protection we have My company have advised a customer minimum levels of stock that we will need to stock to service one of our customers. Our products are manufactured in Asia and are subject to long lead times We have detailed how much stock that we need to hold to manage weekly deliveries to our customer, we sent a spread sheet showing min stock levels and we requested our customer reply and give us assurance that if they decided to move business away from us and go elsewhere that this stock would be taken We have recieved his reply by Email "we agree to honour stocks as per attached" Is this a contract ? and if they dropped us for another supplier what is our position in terms of asking them to take the stock we purchased and warehoused and were hoping to supply
NS - 15-Jun-17 @ 2:51 PM
An artist was given the incorrect time to show up for a show, and demanded that they were paid (because it is the fault of those that put together the event) and instead of giving the artist the full compensation, the organizers agreed to pay him half. Are the organizers allowed to sue and demand for the money back? Is the agreement and payment of the half considered a verbal agreement? The contract does state that he would be compensated upon performance, however the organizers gave him the wrong performance time so that is not possible.
MSB - 12-Jun-17 @ 7:56 PM
My business partner bought me out about 4 months ago he has now asked me for half of accountants fee for doing the books for last year he said it is because I was still a partner then. Dee
Dee - 5-Jun-17 @ 1:53 PM
Hi - I'd like to ask a question. If I pay £1000 deposit for a weekend rental of a house to be rented in 21-25 September and then for some reason I cannot go through with the rental and ask for my deposit back, and they refer me to their terms and conditions o their website - which I didn't receive when putting down my deposit, am I able to challenge that? Especially since she has 3 months to find new renters for that weekend? It seems very unfair to keep someones £1000 when you have received nothing in return. Interested in the legally binded nature of terms not clearly stated at time of purchase. Thanks
Kate - 4-Jun-17 @ 2:05 PM
i started a ltd cleaning company with my mum and sister,they are both the directors and told me i didnt need to be a director too. after 6 years theyve never paid me my profits just my wage i was verbally promised all profits for my side of the business jetwashing and windows is there anything i can do about this we roughly made 700k to 1 million each yr my side of the business was making roughly 100k to 150k a yr we have professional accountants and book keeper all accounts still in boxes company still going now there refusing to pay me my profits, i feel betrayed by my own mother and sister ??
Letdown - 27-May-17 @ 6:22 PM
I sold my business to my sons fiancé for £65000 she gave me £35000 and although her father gave her the extra £30000 to pay me we came to a aggreement for her to pay me monthly as I had a personal loan for this amount she agree to pay the loan for 7 years so she could have back up money in the bank.this was discussed in front of a accountant and solicitor at the time.After 2years 9months because of a badly marital split with my son she has stopped paying me the monthly payment leaving a15000 outstanding Blanche.This leaves me in a real financial crisis what can I do
Wally - 20-May-17 @ 6:54 AM
When we moved into our new house we allowed an old housemate to make use of our spare room from the beginning of April for a couple of months until he got himself sorted. Our agreement was verbal & he is not listed on any contracts or bills, however contributes £255pcm. This has now changed to him wanting to be here until at least September. The arrangement now does not suit us as a family member is relocating to the city & I would like them to live with us instead. As this set up was only meant to be temporary I verbally gave him 6 weeks notice to move out. He was not happy but I feel this is plenty enough time, given it was only meant to be a short term favour. I was wondering if there was a written declaration anyone advises me to give him as back up to our conversation in case he becomes difficult. Thanks
Kate - 9-May-17 @ 2:59 AM
For almost 20 years our charity has always used the same building on a very regular basis. Throughout that time we always had a verbal agreement with the building manager that as a charity and 'main' user of the building our regular dates were 'taken as read' that we took priority over ad hoc bookings. I recently tried to confirm our usual summer holiday booking only to find that he has given our usual dates to someone else. I believed I had a verbal agreement, which up until now the building manager had honoured for the last 20 years. We are a charity, people rely on our services and he knows this. I am confused by his actions, especially as the group he has booked into the building already have their own purpose built building, they just wanted a bit of extra space over the summer holidays (they are a business, not a charity). Do his actions over the last 20 years demonstrate that he acted on a verbal contract? As a regular user, booking the same dates for the last 20years, did he have any duty of care to our vulnerable children and their families? Please could you advise, in general terms, if there is any action we can take for our verbal agreement to be honoured? Thank you.
Confused charity - 8-May-17 @ 1:49 AM
For almost 20 years our charity has always used the same building on a very regular basis. Throughout that time we always had a verbal agreement with the building manager that as a charity and 'main' user of the building our regular dates were 'taken as read' that we took priority over ad hoc bookings. I recently tried to confirm our usual summer holiday booking only to find that he has given our usual dates to someone else. I believed I had a verbal agreement, which up until now the building manager had honoured for the last 20 years. We are a charity, people rely on our services and he knows this. I am confused by his actions, especially as the group he has booked into the building already have their own purpose built building, they just wanted a bit of extra space over the summer holidays (they are a business, not a charity). Do his actions over the last 20 years demonstrate that he acted on a verbal contract? As a regular user, booking the same dates for the last 20years, did he have any duty of care to our vulnerable children and their families? Please could you advise, in general terms, if there is any action we can take for our verbal agreement to be honoured? Thank you.
Confused charity - 7-May-17 @ 6:52 PM
I would just like to ask if a company lists its T@C on its website are they always lawful.? It seems as if a company can steal your money just by stating in its T@Cs no refunds. The problem I have with this is they are a third party taking money for a cab company.We had to cancel the cab but the third party (who won't be paying the cab company) will keep all of the money. I feel this is robbery.
Annie - 3-May-17 @ 5:14 PM
Shezza - Your Question:
Medical negligence.After four years my case is nearing the end. I am still having treatment for my injury and have insisted all the way through that I would not consider a settlement until my treatment was complete and I had a final answer whether it was caused by negligence or not. All evidence is looking as though it was. I have had treatment recently which has been successful and I'm due a follow-up appointment follow up appointment to discuss this in four weeks time. The defendant has admitted breach of duty of care but not negligence. The defendant made an offer to settle in December which was £34,000 compensation to be paid to the DWP for benefits I have received since losing my job.? They would also pay my costs of £100,000. I said that £5000 was not much after all I've been through and my solicitor said that she would phone the very next day and asked for another £5000 and as he was a reasonable chap and he would probably oblige.The money would be in my account the following week.My solicitor was trying to persuade me to accept this offer. She said that I have reached the limit that would be paid by my insurers of £100,000 and if I wasn't successful I would lose my compensation, psybthe defendants costs and anymore that are incurred to them. I was worried and seriously considered settling. explained all the way through that I will not accept any offer until my treatment is finished. I got home from the meeting I went through all the documents and there were questions that were answered from the defendant. The questions were asking whether or not the claimant was still having treatment and if so what kind of treatment? How does the claimant know that the pain is not caused by another ailment etc. Also, after checking recently my Legal cover is £200,000 with £50,000 Legal expenses. When I requested a meeting to discuss this with the solicitor, she refused. Eventually the solicitor agreed to a meeting which has never taken place. When I explained my reasons for wanting a meeting, the solicitor said that she did not want to blind me with science. I then contacted the Legal Ombudsman for advice although at that time I did not follow it through. The solicitor has changed my barrister without informing me or telling me why. I first met the new solicitor two weeks ago. He was veru charming. He had been to court that morning to meet the defendant and the judge. He said the defendant was a reasonable chap and was eager to settle the case. I again explained why I would not consider a settlement at that moment. The barrister advised that we should make an offer to The defendant of £20,000 compensation to me, share half of the costs which were at £120,000 and not inform the DWP as it was government money and has just moved from pot to pot anyway. After bartering I would probably receive £17,000 and he would show me how to hide my money. This offer is not as good as the defendant made. I again repeated why I would not settle. There was

Our Response:
This is beyond our remit to advise. You would have to seek professional legal advice.
ContractsAndAgreements - 2-May-17 @ 11:14 AM
Medical negligence. After four years my case is nearing the end. I am stillhaving treatment for my injury andhave insisted all the way through that I would not consider a settlement until my treatment was complete and I had a final answer whether it was caused by negligence or not. All evidence is looking as though it was. I have had treatment recently which has been successful and I'm due a follow-upappointment follow up appointment to discuss this in four weeks time. The defendant hasadmitted breach of duty of care but not negligence. The defendant made an offer to settle in December which was £34,000 compensation to be paid to the DWP for benefits I have received since losing my job.? They would also pay my costs of £100,000. I said that £5000 was not muchafter all I've been through and my solicitor said that she would phone the very next day and asked for another £5000 and as he was a reasonable chap and he would probably oblige.The money would be in my account the following week.My solicitor was trying to persuade me to accept this offer. She said that I have reached the limit that would be paid by my insurers of £100,000 and if I wasn't successful I would lose my compensation, psybthe defendants costs and anymore that are incurred to them. i was worried and seriously considered settling. explained all the way through that I will not accept any offer until my treatment is finished.I got home from the meeting I went through all the documents and there were questions that were answered from the defendant. The questions were asking whether or not the claimant was still having treatment and if so what kind of treatment?How does the claimant know that the pain is not caused by anotherailment etc. Also, after checking recently my Legal cover is £200,000 with £50,000 Legal expenses. When Irequested a meeting to discuss this with the solicitor, she refused. Eventually the solicitor agreed to a meeting which has never taken place. When I explained my reasons for wanting a meeting, the solicitor said that she did not want to blind me with science. I then contacted the Legal Ombudsman for advice although at that time I did not follow it through. The solicitor has changed my barrister without informing me or telling me why. I first met the new solicitor two weeks ago. He was veru charming. He had been to court that morning to meet the defendant and the judge.He said the defendant was a reasonable chap and was eager to settle the case. I again explained why I would not consider a settlement at that moment. The barrister advised that we should make an offer to The defendant of £20,000 compensation to me, share half of the costs which were at £120,000 and not inform the DWP as it was government money and has just moved from pot to pot anyway. After bartering I would probably receive £17,000 and he would show me how to hide my money. This offer is not as good as the defendant made. I again repeated why I would not settle. There was
Shezza - 1-May-17 @ 3:40 PM
Confused - Your Question:
We paid a £25000 deposit to an estate agent who subsequently went into liquidation. It transpired that our money had been removed from the client account prior to this.The outgoing MD and his PA both told me that the responsibility for our deposit had been agreed to be taken on by the new owners of the company. One of the new MDs confirmed this over the phone, stating that they had our money and would pay it back by the end of that week. On the Friday the other new MD phoned my husband to say that the other MD made a mistake and they would not give us the money.I know that they have paid back other people in our position, 3 out of the 4 people stated that an agreement had been made during the prepack negotiations, although this does not appear to be documented, I have an email from the previous PA stating that the new company had our money. The new company are not responding to my communications, the police have dropped the prosecution and we need our money back. Do I have a case of a verbal agreement from the first director when she told me they had the money and would definitely pay us back?Many thanks.

Our Response:
Why would you pay the deposit directly to the estate agent? Any deposit for a house should have been paid to your solicitor who would have transferred the money into a holding account.
ContractsAndAgreements - 28-Apr-17 @ 10:26 AM
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