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The Law & Verbal Agreements

Author: Garry Crystal - Updated: 22 August 2015 | commentsComment
 
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.

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I withdrew from university last year after receiving one payment from student finance. I rang them at the time and they assured me that it would not affect my loan this year that I would get a full amount and that I would not need to pay this back yet. I applied this year and got the full amount but they sent me a letter last week saying that they are now retracting the first payment that I got last year from my loan this year. I called again and the agent assured me that they had done it wrong and that I would get my full loan back again with a definite yes again and the end advising she would send out written correspondence. Also saying it would be sorted by Thursday and back by then. I looked yesterday and the money wasn't there so I called again and they informed me that I was told the wrong information by both the agents that I can't get the money back because it makes it 'easier' to take it out now. I am as of yet to get a call back form a manager about this as I know that it is wrong. Surely would this verbal agreement be more binding especially because I was told twice on different occasions I would get my full amount?
Kmcd - 22-Aug-15 @ 12:23 PM
I withdrew from university last year after receiving one payment from student finance. I rang them at the time and they assured me that it would not affect my loan this year that I would get a full amount and that I would not need to pay this back yet. I applied this year and got the full amount but they sent me a letter last week saying that they are now retracting the first payment that I got last year from my loan this year. I called again and the agent assured me that they had done it wrong and that I would get my full loan back again with a definite yes again and the end advising she would send out written correspondence. Also saying it would be sorted by Thursday and back by then. I looked yesterday and the money wasn't there so I called again and they informed me that I was told the wrong information by both the agents that I can't get the money back because it makes it 'easier' to take it out now. I am as of yet to get a call back form a manager about this as I know that it is wrong. Surely would this verbal agreement be more binding especially because I was told twice on different occasions I would get my full amount?
Kmcd - 22-Aug-15 @ 11:35 AM
I withdrew from university last year after receiving one payment from student finance. I rang them at the time and they assured me that it would not affect my loan this year that I would get a full amount and that I would not need to pay this back yet. I applied this year and got the full amount but they sent me a letter last week saying that they are now retracting the first payment that I got last year from my loan this year. I called again and the agent assured me that they had done it wrong and that I would get my full loan back again with a definite yes again and the end advising she would send out written correspondence. Also saying it would be sorted by Thursday and back by then. I looked yesterday and the money wasn't there so I called again and they informed me that I was told the wrong information by both the agents that I can't get the money back because it makes it 'easier' to take it out now. I am as of yet to get a call back form a manager about this as I know that it is wrong. Surely would this verbal agreement be more binding especially because I was told twice on different occasions I would get my full amount?
Kmcd - 22-Aug-15 @ 11:24 AM
Nola - Your Question:
Hi Ben - No, I was not on probation. I had finished probation earlier this year. They retracted my contract, even after I was notified verbally from the director of finance.

Our Response:
On reading your previous comment, you could call ACAS for some advice, as you may be better explaining your problem to someone directly in order to make sure your company is working inside its employment guidelines. .
ContractsAndAgreements - 20-Aug-15 @ 1:54 PM
My husband started discussions in April 2014 with a long term friend (who had his own kitchen installation business and also worked for a kitchen worktop company) about setting up his own kitchen business. My husband then pursued the idea and registered his business in June 2014. When initial talks took place with his friend it was verbally agreed that the friend would if required and based on quotes carry out some installation work for the business which the friends own company would then invoice my husbands company for works carried out. Again when the initial discussions took place my husband set up a website which he alone invested his time and money into but represented himself as director of the business and his friend as Installation Director (on the premise that my husband would contract the friend to carry out work if the price was agreeable) the friend was happy with the arrangement and because my husband was hopefully putting work his way the friend said he would pay the £1500 for the website set up. It took from July 2014 until Jan 2015 to ask the friend for the money (on numerous occasions saying he was going to do it or that he'd done it) as the payment was long overdue my husband settled the bill which being his company was happy to do. My husband won his first big contract in late December and work was due to commence in March. In September 14 my husband sent his friend an email asking to meet to discuss how my husbands business and the friends own business were going to work with each other, my husband got no response ( my husband has just found out that his friends business was dissolved in July 2014 as friend even though inundated with work and bragged about earnings failed to file any invoices against his company). In Jan 2015 the friend came to our home and demanded in a very aggressive and hostile manner 20% if any work that went through my husbands business and payment for any work carried out. My husband felt very intimidated but did not verbally agree to his demands. A week later the friend tells my husband that ' his past is catching up with him' and that he couldn't get any form of credit and would be without a van to carry out his own personal work and asked my husband to get him a van through his business which my husband declined. On 22 Jan my husband asked to meet with his friend where he reiterated that he was not a Directoror employee of thebusiness and my husband would only agree on receipt of invoices and after any works completed to pay him, and that it would not be appropriate due to the before mentioned for my husbands company to provide him with a works van. On 30 Jan my husband sent him a message asking if he had sorted a van as yet which his friend messaged to say no one was prepared to be a guarantor. My husband was getting anxious as his friend had no mode of transportation to carry out any work and informed his friend he would need to explore other avenues of contracting someone else to do the w
Caffa - 20-Aug-15 @ 8:38 AM
Hi Ben - No, I was not on probation. I had finished probation earlier this year. They retracted my contract, even after I was notified verbally from the director of finance.
Nola - 19-Aug-15 @ 3:18 PM
I assume you are on you probation period and they have extended it? If so, your company can choose to keep you on or not, regardless whether you have bought a car on finance.
Ben - 18-Aug-15 @ 10:56 AM
I started a job covering maternity leave. Towards the end of the contract I was told that the woman wasn't coming back and that they were looking to make me permanent. This was 4 months ago. I was told they were looking to make me permanent countless times. In a big meeting in July the director who was allegedly to sign off the paperwork to confirm my permanent status, welcomed me to the team as the permanent member of staff in front of about 30 people. Since then I've hurt my back and been told the department may be having a restructure and I no longer have the permanent contract or promise to do so. They have extended me by 3 months. Where do I stand in this? After being told I was going to be made permanent and it being confirmed by the director, I bought a car on finance.
Nola - 17-Aug-15 @ 12:30 PM
Fi - Your Question:
My uncle, who I was very close to, gave me and my partner 25k as a deposit for our flat approximately 3 years ago. At a family wedding 6 months ago my uncle and my partner had a fight and words were spoken. I have tried to mediate but it has just got worse and very bitter. When I told my uncle that my partner and I had got engaged he was furious. Now he is saying that unless I break off the relationship he will seek back his 25k through the courts. I know him and this is not an idle threat. Where do we stand? Please help.

Our Response:
It is very difficult to advise on this as it depends on whether the money was given to you as a loan or a gift or whether he can prove it was a loan and not a gift. It will be more difficult for him to get it back in a lump sum if the money has already been used for the purpose it was loaned or gifted. However, he may be able to get it back in installmants, if he can prove it was a loan. Any correspondence on how this money came to you will be of importance as evidence, even emails, texts etc will help. If you think he will try to take it to court, then you really need to seek legal advice.
ContractsAndAgreements - 14-Aug-15 @ 9:56 AM
My uncle, who I was very close to, gave me and my partner 25k as a deposit for our flat approximately 3 years ago. At a family wedding 6 months ago my uncle and my partner had a fight and words were spoken. I have tried to mediate but it has just got worse and very bitter. When I told my uncle that my partner and I had got engaged he was furious. Now he is saying that unless I break off the relationship he will seek back his 25k through the courts. I know him and this is not an idle threat. Where do we stand?Please help.
Fi - 14-Aug-15 @ 6:50 AM
I emailed the measurements of two bay windows to a window company, over the phone I was quoted a price.The price was very good and man came to measure up.He told me I would get an invoice and needed to pay 10% deposit, then windows would be ordered, balance on installation. I heard nothing more, received no invoice, nothing.Assumed, like other contractors, having been to the site he had changed his mind. Got a call this morning to say windows ready, and wants to install, I do not want these windows as have now made other arrangements, contractor says we have a verbal agreement and I have to pay. He says we have a verbal contract, I said having not had invoice (he said one was sent from his Sage system but has been unable to provide proof it was sent and I have checked my emails and have received nothing) and not having paid the 10% I don't see why he went ahead and ordered them... he said he trusted me? Do I have to pay for these windows? Thanks
AnneB - 13-Aug-15 @ 2:37 PM
Cj - Your Question:
I had a writern contract stating no holiday pay could be carried over from one year to next, then over the Cchristmas period I was asked to do a week tour and was told I could carry all my holidays owing to me over providing I used them in Jan or early Feb I've now bin told the six days I used in jan\feb are from this present yyear is this alloud

Our Response:
You would really need to bring this up with your HR department and ask for this to be looked into. You could also give ACAS a call if you do not have a HR department to see if they can offer any further advice on how you can raise this with your employer.
ContractsAndAgreements - 12-Aug-15 @ 11:34 AM
This must be very upsetting for you. However, there really is little you can do if you passed the pony on to this man. It would be up to him what he did with the horse. Hopefully, your pony will be well treated and will find its way to a nicer home.
Jay - 12-Aug-15 @ 9:49 AM
I sold my horse, sold as seen verbally with the agreement that i would recieve a payment every month. Horse went lame then was sound again. Then i dropped price and payments every month. All verbally. The person has had the horse over 3 months and is now saying horse is lame and has had nose bleed and she not going to pay anymore for her. She has paid less than 1/4 of price. How do I stand?
Claire - 11-Aug-15 @ 10:07 PM
Britz - Your Question:
I made a verbal contract with a wedding photographer to shoot my wedding. I used her for our engagement shoot and was unhappy with the services. She was late for both our meetings and I am fearful she would be late the day of the wedding. In addition, I am unable to fully access the engagement photos and was not given a cd for them as agreed to in the beginning. Would she be able to sue me if I do not choose to go with her? This is in California.

Our Response:
I'm afraid we can only answer UK-based law questions which may not comply with US-based law. However, due to the fact she has already reneged upon your agreement, and not provided you with the agreed product, I'm sure she wouldn't have much recourse to sue. I would send her a letter (keeping a copy for evidence if needed) asking her to release you from the obligations, and outlining the reasons why she has failed in her part of the agreement. I hope you manage to rectify the situation.
ContractsAndAgreements - 11-Aug-15 @ 12:03 PM
Tommo - Your Question:
I rang BT,regarding changing my broadband/TV package & was given a new price which was repeated twice on a recorded phone,when I received an e-mail from BT to confirm the order & the price was totally dirrerent,when I rang back on was told the agent had made a mistake & I could not have the service at the quoted price.is this a verbal contract & can I ask BT to honour it.

Our Response:
If the quote was a genuine mistake there is no offence committed on the company's part, therefore it doesn't have to honour the quote.
ContractsAndAgreements - 11-Aug-15 @ 10:22 AM
I have put a deposit down on a new car and informed the company that I would he trading in one or two cars. They gave a written quote on one and a verbal on the other and said don't worry it won't matter we can sort it out when you pick up the new car. I then contacted them to say that it would be the car quoted verbally that we would be trading in and was told no worries I will get the paperwork sorted. I have heard nothing and rang to find out the exact amount left to pay to be told that the deal that was on finished a week after I paid my deposit and they will now give me £1700 less for my car. My view is that the offer made when I paid my deposit should be honoured. I do have witnesses to the offers made.
Ton - 11-Aug-15 @ 1:28 AM
LucyM - Your Question:
Hi there, I own a business and sent my assistant manager on a training course that cost us £300. We explained to our employee that we would pay for the course as long as she stays with us for a year (verbal contract?) if she left before then, she would need to pay us back for the course. Four weeks after finishing the course she has handed in her notice and is refusing to let us take the amount for the course out of her holiday pay. We have asked her for £270 as our business benefitted from her knowledge from the course for four weeks. So we have covered £30 of the course. Do we have a right to hold back her holiday pay?

Our Response:
I think in this case you should give ACAS a call via the link here as its advisers will be able to give you the best course of action to take.
ContractsAndAgreements - 10-Aug-15 @ 11:04 AM
I had a writern contract stating no holiday pay could be carried over from one year to next, then over the Cchristmas period I was asked to do a week tour and was told I could carry all my holidays owing to me over providing I used them in Jan or early Feb I've now bin told the six days I used in jan\feb are from this present yyear is this alloud
Cj - 10-Aug-15 @ 1:01 AM
i had a pony,for 6 years,the pony had Been x-Ray by my local vet in 2011,which the vet said they are dispose of now. My pony all the years I own him because of his condition,could not be ridden or jump,all he could do was be a buddie in a field all year round. My name is on his passport, I had money troubles,and had to rehome my pony,by putting up an add,describing my horses condition,it would have to be a 5*home. No one was interested because of my ponys condition.weeks went by and I got a private message from an equine place asking could we meet up to look at my pony,which I agree.my friend and I met at my ponys field he said he heard I was selling a pony,I told this man no my pony was free to a5*home were I could see him when I wanted to, I told the man my ponys condition,and he seem to know about ring and side bone. The man said that all he wanted my pony for was to stay in his field to be with his mare and foal,he said I would still own my pony,and the field would be free to me,because my pony was helping his horses out. I was over the moon with this he said I could go up and see my horse when ever I wanted to,then he ask for my ponys passport which I knew and he said needed to go with the pony. I never saw my pony again this man I found out was a horse dealer who sold my pony to someone who I know takes him x-country high jumps and galloping,this man knew my pony was unfit and my pony in a matter of time with his condition go lame for good and he will have to be destroyed and there is nothing I can do police said as far as they are concern he owns the horse,because the vet destroy the X-rays I can't get RSPCA In to help with no poof
sherry - 9-Aug-15 @ 6:22 PM
I made a verbal contract with a wedding photographer to shoot my wedding. I used her for our engagement shoot and was unhappy with the services. She was late for both our meetings and I am fearful she would be late the day of the wedding. In addition, I am unable to fully access the engagement photos and was not given a cd for them as agreed to in the beginning. Would she be able to sue me if I do not choose to go with her? This is in California.
Britz - 9-Aug-15 @ 2:11 AM
I rang BT,regarding changing my broadband/TV package & was given a new price which was repeated twice on a recorded phone,when I received an e-mail from BT to confirm the order & the price was totally dirrerent,when I rang back on was told the agent had made a mistake & I could not have the service at the quoted price.is this a verbal contract & can I ask BT to honour it.
Tommo - 8-Aug-15 @ 6:51 PM
Hi there, I own a business and sent my assistant manager on a training course that cost us £300.We explained to our employee that we would pay for the course as long as she stays with us for a year (verbal contract?) if she left before then, she would need to pay us back for the course. Four weeks after finishing the course she has handed in her notice and is refusing to let us take the amount for the course out of her holiday pay. We have asked her for £270 as our business benefitted from her knowledge from the course for four weeks. So we have covered £30 of the course. Do we have a right to hold back her holiday pay?
LucyM - 7-Aug-15 @ 3:54 PM
Kevin - Your Question:
I contracted to a company with a verbal agreement as to how I would be paid, after 4 months I invoiced them but only received a partial payment.I continued working but still did not receive any further payment despite issuing invoices (mad to carry on I know).During a meeting I stated that I would carry on with my efforts but take payment direct from clients to work off the debt they had built up towards myself, this would still be under the terms agreed previously, so they would still be paid their share out of the debt they owed me.It now comes to pass the they have not and will not for fill their obligation to pay certification fees out of the debt they owe, consequently clients are not receiving the full service they had paid for as only the company I verbally contracted to is allowed to pay the company that issues certificates.Help

Our Response:
I'm afraid you would have to take legal advice on this due to the complex nature of your agreements with this company and the fact that everything was agreed verbally. A solicitor or legal adviser will inform you whether you have any recourse.
ContractsAndAgreements - 6-Aug-15 @ 11:40 AM
I contracted to a company with a verbal agreement as to how I would be paid, after 4 months I invoiced them but only received a partial payment. I continued working but still did not receive any further payment despite issuing invoices (mad to carry on I know). During a meeting I stated that I would carry on with my efforts but take payment direct from clients to work off the debt they had built up towards myself, this would still be under the terms agreed previously, so they would still be paid their share out of the debt they owed me. It now comes to pass the they have not and will not for fill their obligation to pay certification fees out of the debt they owe, consequently clients are not receiving the full service they had paid for as only the company I verbally contracted to is allowed to pay the company that issues certificates. Help
Kevin - 5-Aug-15 @ 10:41 AM
I knew this guy that was supposedly my friend who wanted to buy a car but didn't qualify for a loan. He show me his bank statements n things to persuade me to make a loan in my name for him R20000. I went on and made the loan after we had agreed that he would give me R1000 every month. When I received the money we started to date. The first month he said that the people whom him deposit the money to for the car were frauds. So the money s gone and there is no car. And we broke up a month thereafter I asked and beg for my money, but he always just want to meet in person, cause he know I wouldn't. I always say we agreed apon him paying every month 1000 so we have nothing to say. He blocked my nr and is never at work when phone. This month I'm paying the last installment and I haven't received a cent from him. What should I do as it s an old case??
awaken - 4-Aug-15 @ 2:13 PM
@Sophie - I think in this case it would be advisable to run your question via ACAS, (see link here) due to the complexity of the issue.
ContractsAndAgreements - 27-Jul-15 @ 10:41 AM
I'm not really clear with a uk law soI' m confuse at now. I work via agency with a same company same position full time more than 3 years ago. 15 month ago all of the people who started with me and with my girlfriend - HR offered a contract for us. We accepted inverbal agreement all terms and condition. We went holiday after that.When we cameback all signed a contract expect for the two of us. The following month we asked the director about our contract he told us :" Let's have a look...." We waited for a next month and asked again the HR people who has offered contract and that time she said has not forgotten but she said too busy with other paperwork. Since then, nothing has been done..... A week ago reoffered the same contract to us .....and when we asked them about our previous contract they have ignored . What we can do in this situation because everyone who has been contract they got full time permanent and a benefit and for us offered only 11 month permanent contract only we losing a money and better job prospects during this time. Thanks in advance any help Sophie and Andrea
Sophie - 26-Jul-15 @ 1:07 PM
I'm not really clear with a uk law soI' m confuse at now. I work via agency with a same company same position full time more than 3 years ago. 15 month ago all of the people who started with me and with my girlfriend - HR offered a contract for us. We accepted inverbal agreement all terms and condition. We went holiday after that.When we cameback all signed a contract expect for the two of us. The following month we asked the director about our contract he told us :" Let's have a look...." We waited for a next month and asked again the HR people who has offered contract and that time she said has not forgotten but she said too busy with other paperwork. Since then, nothing has been done..... A week ago reoffered the same contract to us .....and when we asked them about our previous contract they have ignored . What we can do in this situation because everyone who has been contract they got full time permanent and a benefit and for us offered only 11 month permanent contract only we losing a money and better job prospects during this time. Thanks in advance any help Sophie and Andrea
Sophie - 24-Jul-15 @ 1:48 PM
I'm not really clear with a uk law soI' m confuse at now. I work via agency with a same company same position full time more than 3 years ago. 15 month ago all of the people who started with me and with my girlfriend - HR offered a contract for us. We accepted inverbal agreement all terms and condition. We went holiday after that.When we cameback all signed a contract expect for the two of us. The following month we asked the director about our contract he told us :" Let's have a look...." We waited for a next month and asked again the HR people who has offered contract and that time she said has not forgotten but she said too busy with other paperwork. Since then, nothing has been done..... A week ago reoffered the same contract to us .....and when we asked them about our previous contract they have ignored . What we can do in this situation because everyone who has been contract they got full time permanent and a benefit and for us offered only 11 month permanent contract only we losing a money and better job prospects during this time. Thanks in advance any help Sophie and Andrea
Sophie - 23-Jul-15 @ 8:45 PM
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