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The Law & Verbal Agreements

Author: Garry Crystal - Updated: 17 April 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 would like to know if we have a case regarding a verbal agreement. Our agreement was as follows we moved into a house that needed repairs which included hanging drywall painting electrical plumbing etc. We were told by the owners that they would supply the materials and when the work was completed rent would be 300 a month. They didn't supply anything or reimburse us for them. We do have receipts for the building materials and my husband also performed work for them on their cars and personal residence and other rental properties they own. Now they are trying to evict us. Any advice? Thank you
jodi - 17-Apr-15 @ 7:13 PM
@Kazza - you should be able to take it to the small claims court. If you have written evidence to show that you were instructed to do the work and the instruction was not ambiguous in any way, then you should have a case.
Richard - 17-Apr-15 @ 11:55 AM
As a building company we get quite a bit of work from our local authority. Our main point of contact gave us emailed instruction to carry out approx 5k of work and then an additional £2k. We asked for the job reference , which never arrived, so submitted our invoice without it.the authority have refused to pay us as the work was not authorised with a ref number before it started. The work is on a local authority community allotment. How do we stand legally. The person that instructed us is still employed by the council
Kazza - 16-Apr-15 @ 8:31 PM
@steve - I think you would have to take legal advice on this as to whether it was viable to go through a small claims court and whether you had any chance of winning. It's a tricky one when social media comes into the frame!
Andy - 14-Apr-15 @ 12:54 PM
Hi I booked in a 120 metre floor with a customer booked in on the 24th March this was 2 weeks labour I was then called one week before and was told it was not ready for two weeks with no work had to scrape by then was told it was ready when I already had work booked in so could not do it for them thengot a bad review can i claim?
steve - 11-Apr-15 @ 11:40 AM
@TW - you don't say how much you paid him, but if it is under £10,000, I would apply through the small claims court. As long as you have evidence of paying him and any text messages relating to it. You will have to be able to try and prove that the cost you paid him was the cost for the whole work and not just part.
Ken - 8-Apr-15 @ 2:53 PM
@Orc - this is not what you want to happen when you go away. Did you check out her credentials beforehand? If your dogs actually ended up needing surgery because of her actions directly, then it might be worth going through the small claims court. I would seek some legal advice or at least speak to the Citizens Advice first. You certainly should get your money back and I'd be seeking the vets bills too.
Gill - 7-Apr-15 @ 10:31 AM
Work commenced on two extensions of my house in October 2012 by a builder who was working with the help of his dad. To date he has not completed the work, even though he has promised to come back, to which I have a text received from him in February 2015 which confirms that. Unfortunately, I have not seen him for two months and I do not trust him as his work, in part, is substandard. I completed payment in December 2012 and there is much work that is out standing, to which, I have been quoted from another builder will cost me a further £5000 to complete. The contract we had was verbal, there is no written quotenor receipts to support my claim, although, the building inspector has been out on two occasions and he is the named builder. In sum, I want the work completed on my home, but not by him. Would I be entitled to compensation so I can pay another builder to complete the work?
TW - 6-Apr-15 @ 1:23 PM
I had a verbal agreement with someone to look after my dog and pups whilest I had to go away for 5 days. She was given clear instructions how to feed and look after them and what hours would be needed to be put in. So she requested payment upfront which I gave. Can I request a refund after she broke terms and decided to change their feeding against the vets advice which led to 5 puppies needing emergency surgery and care I could not afford and ended up having to sign away to the RSPCA. And am I able to claim money from her for the medical work I had to have done on the mother ( who now thank god is slowly on her way to recovery ) please any help would be greatly received many thanks
Orc - 3-Apr-15 @ 9:06 AM
@mt - Did you have a contract for your new role? It seems that it wasn't very well thought through if there was no salary agreement prior to being offered the position. I think in this instance I would give Acas a call to see whether or not you have any redress. You can speak to one of its advisors via the link here. I hope this helps.
ContractsAndAgreements - 31-Mar-15 @ 3:09 PM
@Ann - this happened to me. I backed into a car, it really was the tiniest of scratches. I agreed to pay £400 for the damage (excessive, but rather than go through my insurance and ruin my no-claims). But then the woman wouldn't let me pay the garage directly and she wanted the money to go directly to her. So, not trusting her, I went through the insurance, the next thing I knew she'd claimed for whiplash and the car being a right off. The investigators came out and I showed them all the evidence, photos of the scratch, texts etc of her asking for the money to go directly to her, but it didn't help, she got £6K in the end for a tiny scratch.
Libby - 31-Mar-15 @ 12:30 PM
@Ann - I think you may have to do this through your insurers now, as it looks like she may be trying to mess you around and these issues have a habit of spiralling out of control. Do not give any money on a verbal agreement.
ContractsAndAgreements - 31-Mar-15 @ 12:23 PM
Hi, I agreed to a change in job role in Feb 14, by May 14 I was carrying out my new role in full, my pay had not yet been agreed as this was waiting for approval.In October due to unforeseen circumstances no decision had been made so my boss agreed a 5k addition to pay, this was lower than expected,but I accepted but we decided that it would be paid in April 15 and back dated. Then in Feb, my boss left and the new boss said that he could not agree to this agreement and rescinded it. Although the agreement was verbal, I do have email communications refering to the agreement.I have been doing the additional role since may14 and they have said that my pay will be reviewed only, as before but with out the £5K. Where do I stand with this as I understand if we came to an agreement and I accepted, and carried out the additional duties they should honor the agreement? Thanks for your help
mt - 29-Mar-15 @ 8:38 PM
My husband ran into a vehicle with his bike. The owner of the vehicle took it to a repair center. The cost of the repair was quoted 250.00. The owner of the vehicle agreed to have the repair done at that shop in January. My husband went to the shop on the day the repairs were to be started to pay the 250.00. He left a check with the business owner. The owner returned the check a week later because the vehicle owner never brought the vehicle for repair. Now 4 months later the vehicle owner is demanding 500.00 for her vehicle repair. Based on the verbal agreement between all parties on the 250.00, is my husband obligated to pay 500.00 now for the repairs?
Ann - 29-Mar-15 @ 12:09 AM
A telephone company is trying to charge me a £500 cancellation fee.My three year contract expired but their argument is I made a verbal agreement to renew the contract.If I did this it was a trick tactic by the company. Any advice would be greatly appreciated
Noel - 24-Mar-15 @ 5:48 PM
@Jimthegaff - I think in this case you should give Acas a call via the link here for some direct advice. I hope this helps.
ContractsAndAgreements - 23-Mar-15 @ 10:24 AM
I recently handed my notice in at work on the 23rd of February 2015 requesting that my last worked day would be the 27th of March 2015. This was verbally agreed by the CEO who then put me on "garden leave", my minimum notice as per my contact was 4 weeks which my contact stated could be varied by mutual agreement, on the day i left for garden leave the CEO said that he accepted the conditions of my letter. I then received a letter on the 9th of March from the Operations director who said that the extra weeks notice will not be required and they will only pay me till the 20th of March and will also not pay me accrued holidays not taken, i assume as I am on garden leave. What can I do ?
Jimthegaff - 19-Mar-15 @ 11:27 AM
@Ting Ontario - I'm afraid we can't help you here as this is a UK-based site and we are only familiar with UK property law.
ContractsAndAgreements - 17-Mar-15 @ 3:07 PM
@Bell -if it is written in the will, you will get the money automatically anyway regardless of whether your brother says you told him otherwise. He would have to take you to court in order to try and extricate the money. I'd have a chat to the solicitor with whom the will is placed with.
Nathan - 16-Mar-15 @ 11:28 AM
I am the tenant give landlord 6 post dated cheques for the next 6 months rental payment, landlord ask me whereI am going and when will come back? I told landlord I am going to Overases, if I delay to coming back, I will pay you whatever the arrears I owe you. Landlord says: no problem. This transaction was made during my farewell conversation with landlord. Landlord breached the verbal agreement, sued me at Ontario LTB 35 days later after landlord cashed the last cheque, while both LTB and Landlord knowing tenant still remaining Overseas, tenant unknowing there was a Hearing. Therefore, Landlord successful got eviction order against tenant and Captured tenant remaining huge valuable tntelletual property which is more value than the whole House. Landlord repeatedly ignored and refused arrears and legal fees payment, by taken action captured and disposed tenant 40 years livelihood property. I was living that whole house for last 21 years. Please tellme does the initial verbal agreement made during my farewell conversation is a legal binding to the court?I am living in Ontario, which court I can sue landlord for fraud bybreached verbal agreementand can I win the case? Thank very much for your reply.
Ting Ontario - 15-Mar-15 @ 2:50 AM
@tg - yes, as while it was in your business address it would also be in your name.
Sean - 13-Mar-15 @ 2:32 PM
My mother past away last year and the family home is to be divided x7, but my brother said I told him on the phone I did not want a share of the house which I never did. Now I will have to take him to cout over this as the house is valued at £2000,000. In London.
Bell - 12-Mar-15 @ 11:18 PM
I signed a contact for my business phone. The contact was my business address,if i move out of that address and move to another property dose the contract still stand?
tg - 12-Mar-15 @ 3:01 PM
@Saesha - did you/he sign any contract? Has he given any reason why he is doing this? If it was a verbal contract then he has every right to change his mind. But, I think I would stick to your rates, you don't want to undersell yourselves and besides you would end up doing the job with resentment and that is not good in a caring environment. So if he doesn't want to pay you your rate I would ask him to find someone else. He might find that if he looks around he can't get the rates that you have given or the consistency and reliability unless he goes through an agency, who will be wanting agency fees on top of the employee's wages. Stick to your guns. With your experience, you will be able to find work elsewhere.
Suze - 12-Mar-15 @ 11:44 AM
Supposed that in an oral contract, one of the contracting parties has already complied, can the other party avoid fulfillment of those incumbent upon him by invoking the statute of frauds?
ger - 11-Mar-15 @ 8:41 AM
Can anyone advice me. My sister & I do private home care in peoples houses. We were asked by a Son to look after his Mother in her own home 12 hrs aday. We told him our rates and how we worked. He agreed to this. We have been working with his Mother now for 4 yrs in her home on a self employed basis and have been paid the same rates as ageed 4 yrs ago. Last week the Son has told us he wants us to take 17.5% off our hourly rate!! This will take off £35.00 a day from our wager and for me I will loose £500 a month! Can he do this?? after all he agreed the price 4 yrs ago. My sister & I want to say NO this is our rates and this is what you agreed to pay and have paid. Would love some good advice pls.
Saesha - 10-Mar-15 @ 12:49 PM
@darrensudbury - I think CB and CTC can be split between both parents, so you would have to look into that. However, the whole issue is a bone of contention and an early day motion was put into place in 2010 in order to deal with this, see one of our partner articles Benefits System and Shared Parenting, link here. You may want to write a letter to your MP in order to see where this is up to. I hope this helps.
ContractsAndAgreements - 10-Mar-15 @ 11:43 AM
@LE205 - I think I would ask to see proof of the bills and the amounts. Fair enough if you clocked up a big gas or electricity bill without realising, but usually you would sort out the utility bills with your landlord before you left. You could take a trip to the CAB to see where you stand. It really would have to be in your agreement regarding extra payments, sounds a bit odd to me.
Dan - 9-Mar-15 @ 10:15 AM
hi I'm looking for advice regarding my ex partner and myself we have 2 chipdren together and have them half the week each so we agreed to split the child tax credits and child benefits equally no we have recently had an argument she has decided to no longer pay me my half and I'm strugglingg buying things for the children when i have them is there any way to go about this as there was a witness to our agreementt althogh it was never put in writing
darrensudbury - 7-Mar-15 @ 8:10 PM
I recently vacted a property where 4 of us lived, each with our own tenancy. After paying my full rent including £30 towards a 1/4 of the bills, my landlord is asking for an additional £167.70 towards the bills, as the £30 did not cover them. There is no statement in the tenancy agreement regarding procedure when the £30 does not cover the bills. The landlord has told me that we had a verbal agreement before I moved in stating that when there is an underpayment, he splits whatever is needed to settle the bill between 4 and asks each of us for more money at each year end, but this would only ever be £30-£40. So I agreed thinking I'd never need to pay more than this. Do I owe him anymore than £40?
LE205 - 5-Mar-15 @ 4:01 PM
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  • jodi
    Re: The Law & Verbal Agreements
    I would like to know if we have a case regarding a verbal agreement. Our agreement was as follows we moved into a house that…
    17 April 2015
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    Re: The Law & Verbal Agreements
    @Kazza - you should be able to take it to the small claims court. If you have written evidence to show that you were…
    17 April 2015
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    Re: The Law & Verbal Agreements
    As a building company we get quite a bit of work from our local authority. Our main point of contact gave us emailed…
    16 April 2015
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    @TW - you don't say how much you paid him, but if it is under £10,000, I would apply through the small claims court. As long…
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