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The Law & Verbal Agreements

By: Garry Crystal - Updated: 22 Sep 2018 | 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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My ex bought me a car 6 years ago. It was verbally agreed I'd pay the money back as and when as I wasn't in secure work. We then split up 2 years ago. I heard nothing about the car payment in the whole 2 years separated. The car is now worth 1000 if I'm lucky. Yet my ex wants me to pay 4000. Has threatened to take me to the high court over it. The car is and always has been in my name and I've paid for everything road tax, insurance repairs etc. Where do i stand legally with this?
Pixi09 - 22-Sep-18 @ 11:45 AM
Hi i currently hire a subcontractor to deliver goods, he has been doing business with a main competitor without the MD's knowledge which has now come to light, there has never been any official contract or terms of delivery in place and the MD would like to terminate his service is there any legal requirements prior to terminating his services. Thanks
KM - 17-Sep-18 @ 1:05 PM
@Worried mum- ethically it is very bad practice. But unfortunately it can be done as at this juncture he has only paid the letting agency and not the landlord. It gives the landlord room to come up with any excuse. Until he actually signs on the dotted line - he really hasn't any comeback. Shocking, yes.
JanE - 10-Sep-18 @ 2:57 PM
My son is moving away and has paid a deposit on a flat and agreed with the letting agency to go down the 300 miles a few days before and sign for the flat. They have now saidthe flat has been seen by someone else who has offered more money. Can they do this
Worried mum - 9-Sep-18 @ 6:14 PM
@Jmozz - remember they also have to prove they did the things they said, more so than you have to disprove they did. The courts will not allow the removal firm to charge an extortionate amount - if you are confident - let them take you to court. If you have evidence of the original quote - keep it.
RoBC - 7-Sep-18 @ 2:39 PM
I entered a verbal agreement with a house Clearance company by phone to clear my father's house after his death for £850. They advertised locally but on the day travelled from hundreds miles away ! After starting they announced it would go to a second day and wanted double payment.We reluctantly agreed to this as we're not commited. However invoice received now is £1200 more than double payment. They say it took three commercial dump loads more than anticipated. They refuse to providereceipts for dumping at recycling centre giving complex excuses about contracts/ weighing and types of waste dumped but are threatening to sue if we don't pay.They claim to have explained all about extra costs/ loads etc by mouth - they didn't but how can I ever prove this?I do have texts and emails between probate beneficiaries after their first quote and acceptance saying £850 for a 3 bed house clearance so can evidence that is what your understanding of contract was.
Jmozz - 4-Sep-18 @ 2:42 PM
mattblackman123 - Your Question:
If a verbal contract is created but no time length, in which the contract is valid, is the verbal contract complete?

Our Response:
Your question is far too vague to answer. Much depends upon the circumstances surrounding the contract and what the contract is for.
ContractsAndAgreements - 4-Sep-18 @ 9:55 AM
If a verbal contract is created but no time length, in which the contract is valid, is the verbal contract complete?
mattblackman123 - 3-Sep-18 @ 8:50 AM
Mr dee - Your Question:
Good day.I have a verbal agreement with someone who is running his business under someone's property ,so I pay R3000 per month for car wash and the rent is about R9500,which I payed two months ,now this person he want to breach the contract because he can see the business is doing well.Everything I did from the first is all my cost.Advice

Our Response:
As we are a UK-based site, we can only advise on UK law and verbal agreements. Unfortunately, you would have to seek advice in your own country.
ContractsAndAgreements - 16-Aug-18 @ 10:18 AM
Good day . I have a verbal agreement with someone who is running his business under someone's property ,so I pay R3000 per month for car wash and the rent is about R9500,which I payed two months ,now this person he want to breach the contract because he can see the business is doing well .Everything I did from the first is all my cost. Advice
Mr dee - 15-Aug-18 @ 1:46 PM
Hello - I recently partnered with a magazine for advertising. However in their online version they used unapproved artwork that I had expressed I would not use & was not happy with but they refused to change despite it being possible in the online space and then incorrectly laid up the correct artwork in the offline (print) version. So the resultt was 70% wrong. I sent multiple emails with my concerns which were not addressed. I then pulled out of the next month given they had not addressed my concerns, updated the artwork or given me any confidence that the following month would be a better experience. They then went ahead and printed my work in the next month despite the fact that I had pulled out from any further advertising with them given the quality and experience. I've never received an invoice from them but I offered to pay 50% of the first month which I thought was a very good offer given 70% of the work was wrong, purely out of good will. Now they have said that I have breached their contract and they want to charge me the full media kit price which is more than 50% again of the original price they offered me. If there was a contract I feel that they would have been in breach given they used unapproved artwork to start with. In my mind as I have explained the previous placements were not what I wanted or approved, the second placement I wasn’t even aware they were placing as I had asked for it to be pulled. I wouldn’t pay full price for faulty goods and thus do not feel comfortable paying full price for something I did not want to be published. I'd really appreciate your opinion. Thank you.
Leila - 14-Aug-18 @ 8:12 PM
Leila - Your Question:
Hello - I recently partnered with a magazine for advertising. However in their online version they used unapproved artwork that I had expressed I would not use & was not happy with but they refused to change despite it being possible in the online space and then incorrectly laid up the correct artwork in the offline (print) version. So the resultt was 70% wrong. I sent multiple emails with my concerns which were not addressed. I then pulled out of the next month given they had not addressed my concerns, updated the artwork or given me any confidence that the following month would be a better experience. They then went ahead and printed my work in the next month despite the fact that I had pulled out from any further advertising with them given the quality and experience.I've never received an invoice from them but I offered to pay 50% of the first month which I thought was a very good offer given 70% of the work was wrong, purely out of good will. Now they have said that I have breached their contract and they want to charge me the full media kit price which is more than 50% again of the original price they offered me. If there was a contract I feel that they would have been in breach given they used unapproved artwork to start with. In my mind as I have explained the previous placements were not what I wanted or approved, the second placement I wasn’t even aware they were placing as I had asked for it to be pulled. I wouldn’t pay full price for faulty goods and thus do not feel comfortable paying full price for something I did not want to be published.I'd really appreciate your opinion. Thank you.

Our Response:
If you cannot agree a resolution between you both, then it sounds as though this may have to be something for the small claims court. However, if you signed up to a certain amount of advertisements across a period of time, you might have to allow the chance for the ad company to put any mistakes right i.e by giving a compensatory ad etc. Much depends upon the terms of the agreement. Most advertising companies have an agreement package they would require you to consent to via email.
ContractsAndAgreements - 14-Aug-18 @ 3:03 PM
Hello - I recently partnered with a magazine for advertising. However in their online version they used unapproved artwork that I had expressed I would not use & was not happy with but they refused to change despite it being possible in the online space and then incorrectly laid up the correct artwork in the offline (print) version. So the resultt was 70% wrong. I sent multiple emails with my concerns which were not addressed. I then pulled out of the next month given they had not addressed my concerns, updated the artwork or given me any confidence that the following month would be a better experience. They then went ahead and printed my work in the next month despite the fact that I had pulled out from any further advertising with them given the quality and experience. I've never received an invoice from them but I offered to pay 50% of the first month which I thought was a very good offer given 70% of the work was wrong, purely out of good will. Now they have said that I have breached their contract and they want to charge me the full media kit price which is more than 50% again of the original price they offered me. If there was a contract I feel that they would have been in breach given they used unapproved artwork to start with. In my mind as I have explained the previous placements were not what I wanted or approved, the second placement I wasn’t even aware they were placing as I had asked for it to be pulled. I wouldn’t pay full price for faulty goods and thus do not feel comfortable paying full price for something I did not want to be published. I'd really appreciate your opinion. Thank you.
Leila - 14-Aug-18 @ 1:05 PM
Hi,the father of my two schooling boys passed on a few months back. I have acquired letters of administration from the area chief and District Commissioner granting my son's and I access to any of his estate n properties. I have discovered that there is a land he sold of which an agreement was duly signed but he did not collect the Bal of kshs 100, 000/= he was to receive later on. He fell sick and what happened is that the step mother, the buyer and a lawyer called him up to inform him that the balance he was supposed to collect was to cater for processing and transfer of the title deed. He accepted their demand verbally without signing down on the second agreement drawn downby the lawyer, the buyer n the stepmother. Am I entitled to demand for the balance owing to the fact that my late husband did not sign having rcvd the money.? Kindly advice!
Abby - 13-Aug-18 @ 2:25 PM
@BS - I don't think so. You'll be lucky. Your daughter would have to apply through the small claims court, but the meal would be seen as a gift. If he didn't turn up, it's pretty rude but she has no grounds to claim.
OTTI - 3-Aug-18 @ 12:39 PM
my daughter got married recently and a family member said he was coming to the meal with his 2 children , the meal cost £100 per head , she has got a text message saying he was coming with the kids but did nt turn up , but try to come to the evening reception with his new girlfriend , but was told not to come with her as she was not invited , is she entitled to claim the £300 back from him
BS - 2-Aug-18 @ 4:36 PM
Hi, I was approached by a car registration company to sell my private number plate. They offered me a figure and Iagreed. This was over the telephone. I thought I could change my mind at anytime as I have not signed the Power of Attorney they sent me. They have agreed to sell the number plate to a third party, who are now suing them for breach contract. I am bound and compelled to sell them my number plates?
SS - 11-Jul-18 @ 3:25 PM
@Groot - my god she isn't even dead yet and you are arguing over her will. Your mum can leave the money to whomever she wishes - verbal agreement or not and if she wishes to change her mind then that is completely up to her. You could look at it that she bought a house that you have lived with rent-free and she is buying you another property. It seems a completely selfish and ungrateful approach not from her, from you. Allow your mum to be happy in the latter part of her life and let her spend her money excactly how she wants. As remember HER money is hers, not rightfully yours. If you run a successful business, then fund yourself but don't expect your mum to. If I were your mum I'd change the will...as a matter of principle.
MaCC - 2-Jul-18 @ 11:12 AM
My dad died in 2000 leaving the family home to my mum - fine. 7 years ago she decided to move to the location where I and my husband lived. The 3 of us agreed that she would purchase a house that we would all live in and that it would be passed to me as my inheritance when she died. In return I would look after her if she became poorly. She remarried last November and moved in with her new husband. Last week she told me that she is selling the house. We had a verbal agreement - Scots Law - and I have lots of witnesses to this including my late father’s best friend who had a law firm and withwhom Mum has her Will. As it stands her Will says that the house is to be left to me. She is going to purchase a smaller property for me and my husband, but still in her name. Who is to say she won’t change her mind and sell that too. She doesn’t need the money. I believe her new husband has plotted this all along. I run a successful business from the house which requires land. I am totally devastated at this complete u-turn. She had a small stroke last December and has been quite irrational ever since and does everything her husband says. What can I do?
Groot - 1-Jul-18 @ 2:06 PM
My partner needed work doing on his vehicle and sought out a known mechanic he had used before. He did not done any work on the vehicle but took it to a third party to get the welding done as he said he didnt do welding. (A registered company) Money was given to the mechanic to complete this work however he never passed it onto the welder and has now done a disappearing act with a large sum of money. The welder will not return the vehicle as he has done the work but he had the agreement with the mechanic not the owner. Where do we stand on getting our work vehicle back? Citizens advice say they cannot hold the vehicle as we never had the contract with them. Which laws enforce this? We intend on sending a notice before action letter.
Sarah L - 29-Jun-18 @ 8:36 PM
KMH - Your Question:
My Mother passed away 5 years ago and left her half of the house to my Brother and I, the other half belonged to her partner. Her will stated that if her partner sold the house then my brother and I would get our share of the property. Her partner somehow convinced us to change the will in his benefit so that he could move if he wished but we would then own half of the new house and we would get our share of the house when he dies. He also stated that if he became in a position to buy us out then he would and if he met another partner in the future and she moved in then he would find a way to give us our share of the property. Back then he hadn't met anyone else and we were in contact and would see each other every week but a few months later, he met someone else and contact ceased. While there is no animosity there at all regarding the fact that he has found another partner, (He is in his early 50's and we fully expected him to meet someone else, also we know that our Mum would have wanted this) his partner has now moved into the house.Is there anything we can do regarding the verbal agreement we had about someone else moving into the preperty? This was all discussed in the solicitors office when we amended the will but was not written down. I look forward to your reply.

Our Response:
In this case, you would really need to seek legal advice in order to fully explore your options as there will be a few variants to consider.
ContractsAndAgreements - 19-Jun-18 @ 10:45 AM
My Mother passed away 5 years ago and left her half of the house to my Brother and I, the other half belonged to her partner. Her will stated that if her partner sold the house then my brother and I would get our share of the property. Her partner somehow convinced us to change the will in his benefit so that he could move if he wished but we would then own half of the new house and we would get our share of the house when he dies. He also stated that if he became in a position to buy us out then he would and if he met another partner in the future and she moved in then he would find a way to give us our share of the property. Back then he hadn't met anyone else and we were in contact and would see each other every week but a fewmonths later, he met someone else and contact ceased. While there is no animosity there at all regarding the fact that he has found another partner, (He is in his early 50's and we fully expected him to meet someone else, also we know that our Mum would have wanted this) his partner has now moved into the house. Is there anything we can do regarding the verbal agreement we had about someone else moving into the preperty? This was all discussed in the solicitors office when we amended the will but was not written down. I look forward to your reply.
KMH - 18-Jun-18 @ 11:01 AM
Hi don't no we're to start with the legal side to this I was involved in a fight were I was the victim I had to restrain a lad to the floor as he was assaulting me this resulted in items I was wearing being damaged my phone being smashed and my tooth being knocked out I've got the details off the person and he's said that he will pay for the damage due to him bring under a lot off pressure and it was out off character how do I go about getting this blinded as I'm not sure how I go about this
Warren - 12-Jun-18 @ 5:50 PM
@LaS - You can claim the money back via the small claims court or MCol. Normally you would have to give a weeks notice where no contract was signed. Your landlord cannot keep the money if he cannot produce a contract. It's worth you making the application, as you are likely to have a better case than your landlord where no contract has been signed.
PeteV - 12-Jun-18 @ 3:46 PM
@MarkS - if you are the exexutor of her will, then the money would come out of her estate. If you were not living together then you may be able to dispute it, but if you were living at the same address then yes as her husband you would be responsible :(
MJ - 12-Jun-18 @ 2:49 PM
Hi, I entered into a verbal agreement whereby I was renting out a room in a property that a person owed. It would be a live in landlord based situation. This came about due to myself desperately need somewhere to live as I was renting an apartment with my ex at the time. At this point, the landlord stated he was planning on renting out three bedrooms in his house and one room would be ready to move into if I had wanted to rent from him. During the course of this conversation, I had agreed to temporarily move in as I was planning on moving back to London once I had found a job. The agreement between us was that I would be renting the room (all bills included) until the situation changed or I found a job in London. No was no discussion of paying a deposit or timescale to give notice. There was no written contract between him and I. It was purely verbal communication. The rent for the room was £95p/w which is what he stated he wanted and I had agreed to. The first month I had paid him £410 and when it came closer to paying for the second month I had asked him if I could start paying weekly going forward as I was having job interviews in London. He said it was easier to continue paying monthly for him as he had other bills to pay (or something to that affect). So second months payment was made on time. A roughly 4 days after making the second paying, I found the location of the property was not conducive to my current work location so had to move to a property closer to work. I had informed him the same day that I was looking to move somewhere closer to my workplace (preferably in the city) as it was more beneficial to me. I also suggested to him that he should start looking for a new tenant as the room I was staying in would be ready for someone else to move in as soon as I moved out. He stated, his property wouldn’t be ready for anyone to move in yet as he had finished completing the work that needed to be done on all the rooms, plus other aspects of the property. The day before I had moved out of the property which was approximately 2 weeks after making my second rent payment, I told him I’m moving out the next day and I would like to be recompensed for overpaying on rent. He implied I wouldn’t be due anything back as normal tenancy agreements you have to pay deposit and give notice. I had reminded him that we didn’t discuss stipulations as to paying deposit or giving notice and the original agreement and if he wanted deposits or notice to be given we should have signed a contract. The current situation as of yesterday, he is refusing to pay me back the difference in rent because he felt that if it was a normal tenancy I would have to give a months notice, I would lose a deposit because I’ve moved out less than 6 months of a minimum tenancy and he wasn’t able to fill the room I was renting because I gave him 24h notice of moving out. He also stated he is unable to afford to pay it back to me. I would like some advice on what I can do. I have bank
LaS - 12-Jun-18 @ 11:16 AM
My wife had an account with Scottish power utilities. She wound up the account and moved to different provider. A dispute occurred about the remaining balance which went unresolved as she recently died of cancer. Scot power are now pursuing me for this amount. I have refused to take on the account as my own. Am I liable for her debt? I
MarkS - 12-Jun-18 @ 4:44 AM
@M1ch43l- if he is the registered owner of the car, then the car is his. Only if the family can prove yor brother owed the person who died money could they apply to the small claims court.
Insu - 11-Jun-18 @ 3:29 PM
I entered into a verbal agreement and shook hands on conditions of a lease and equipment sale of a car wash.The three requirements where. 1 Me being a trained car detailed could not set up inopposition to the buyer.Which I fufillied by going to work 10 miles away in other town. 2. I would stay on free of charge to teach him the ropes and help him with work he could not do.That I done. 3.All I asked was if he was ever selling the lease I hot first offer of getting it back.This did not happen.He sold it to an undertakes firm?. DoI have a case for claiming back the costs that I built up working for free and travelling out of town for 12 months.I have witnesses who were present when we shook hands on it?. Thanks for any advice
Jamie - 9-Jun-18 @ 6:51 PM
Just over a year ago my brother was given a car, the owner died and the person who took control of the assets gave it to him (she is family). Now my brother wants to sell it as he no longer needs it and he is the registered owner of it, but they are kicking off wanting it back,he is not selling for profit but for what he invested into it, there was kind of a verbal agreement but it was never really mentioned till now. Any advice
M1ch43l - 9-Jun-18 @ 2:08 AM
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