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The Law & Verbal Agreements

By: Garry Crystal - Updated: 11 Jul 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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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
Kaz - Your Question:
My ex and I split with him having a lot of debt in my name. He resided at my house for 17months. We had a loan together, car finance in my name, (he had the car) and a mobile phone contract in my name. He had me over a barrel as if he did not continue to pay his share I would have lost my house. He said some time after that he wanted some money when I sold my house., I just nodded accordingly as I was to worried about the things that needed paying now. We never talked about terms and conditions. He now however after paying off his debts and me selling up wants me to pay him some money. I refused and he was advised he wouldn't be able to obtain any equity in my house. He has now taken me to small claims saying I agreed to give him 3k but he wants 7k for home improvements which I can't prove who or when they was paid.We have mediation tomorrow. Where do I stand?

Our Response:
It is highly unlikely your ex could claim anything after 17 months of living together unless he can prove he contributed a significant amount of capital towards refurbishments of your home. Please see link here, which should tell you all you need to know. You don't have to agree to anything via mediation.
ContractsAndAgreements - 8-Jun-18 @ 1:47 PM
@Dilne - if you had a restrictive covenant in place that formed part of the contract, then you can do this. But much depends upon whether the covenant is reasonable and whether your ex employees can reasonably justify why they did what they did. It's precarious and can backfire. I'm not sure there are any 'no win - no fee' solicitors who would deal with this, you can always enquire.
SiB - 8-Jun-18 @ 12:17 PM
My ex and I split with him having a lot of debt in my name. He resided at my house for 17months. We had a loan together, car finance in my name, (he had the car) and a mobile phone contract in my name. He had me over a barrel as if he did not continue to pay his share I would have lost my house. He said some time after that he wanted some money when I sold my house ...., I just nodded accordingly as I was to worried about the things that needed paying now. We never talked about terms and conditions.He now however after paying off his debts and me selling up wants me to pay him some money. I refused and he was advised he wouldn't be able to obtain any equity in my house. He has now taken me to small claims saying I agreed to give him 3k but he wants 7k for home improvements which I can't prove who or when they was paid . We have mediation tomorrow. Where do I stand?
Kaz - 7-Jun-18 @ 11:06 PM
Hi We had a thriving business 9 self employed reps all under contract not to talk or persuade customers away from us for two years.Three reps set up for them selves and started moving our business away within twelve months we are now back to a start up company.The cost fear of taking these rouges to court is worrying is it worth it? Is there any way of doing this of no win no fee?
Dilne - 6-Jun-18 @ 9:27 PM
Nick A - Your Question:
Hello,I am a consultant. I had an agreement with the client (the MD at the time) that if my services were no longer required he would give me no less than 3 months warning and would continue to approve payment on the same terms as before throughout that period. As I provide services on a time and materials basis, and we had agreed to an exclusive arrangement, we agreed that was a fair and acceptable contingency. This had been agreed for 6/7 months until the MD was asked to leave the business at short notice on non-performance related grounds. The interim MD has now stated that he is uncomfortable maintaining this arrangement, although does not dispute that it was in place with his predecessor, and wishes to renege on it. There are other individuals in the organisation with similar arrangements, and my knowledge of this elsewhere posits that this is not unusual.What grounds do I have for recourse? I feel that I am due the period of time agreed, and corresponding remuneration. The key issue for me is that no party denies that the verbal agreement was extant and definitive. Can you help advise please?Thank you,

Our Response:
If you are self-employed, unless it is in writing there are generally no notice periods that either you or your client need to provide in order to terminate the contract. If there are notice periods, then they should be written down in any agreement between yourself and the client (or third-party recruitment agency). However, your client may be in breach of contract, if for instance you can prove that you have had to buy something in three months in advance in order to provide to the company and this was agreed via email or verbally. Unfortunately, this area of contract law is complicated, so you would need to take advice from a qualified adviser in order to explore your options and to see whether you have a claim.
ContractsAndAgreements - 1-Jun-18 @ 10:34 AM
Hello, I am a consultant. I had an agreement with the client (the MD at the time) that if my services were no longer required he would give me no less than 3 months warning and would continue to approve payment on the same terms as before throughout that period. As I provide services on a time and materials basis, and we had agreed to an exclusive arrangement, we agreed that was a fair and acceptable contingency. This had been agreed for 6/7 months until the MD was asked to leave the business at short notice on non-performance related grounds. The interim MD has now stated that he is uncomfortable maintaining this arrangement, although does not dispute that it was in place with his predecessor, and wishes to renege on it. There are other individuals in the organisation with similar arrangements, and my knowledge of this elsewhere posits that this is not unusual. What grounds do I have for recourse? I feel that I am due the period of time agreed, and corresponding remuneration. The key issue for me is that no party denies that the verbal agreement was extant and definitive. Can you help advise please? Thank you,
Nick A - 31-May-18 @ 10:45 AM
I am about to buy a cafe as a going concern.. I will inherit 3 staff all of whom only have verbal contracts. I want to keep 2 of the 3 staff but the third will go on maternity leave a week after i take over and i dont want her back. She currently works as and when required by the current owner who is her baby's father. Do I have any rights?? I plan to give the remaining staff written contracts and want a new employee to join them.
Katya - 29-May-18 @ 7:22 PM
Hi, I had made a verbal agreement with a solicitor to sell a parcel of land that I own in the Caribbean to an intended purchaser. I changed my mind within 72 hours and advised the solicitor that the land was no longer for sale. However, the solicitor had acted on the verbal agreement and within this time had taken payment for the land and was preparing the paperwork etc. He has now advised that I am in breach of contract even though I have not signed any paperwork. He has advised that the intended purchaser can insist that the sale still go ahead due to "part performance" of contract in that they paid the solicitor the full asking price for the land and were awaiting the paperwork to be signed and agreed etc. He has also advised that the intended purchaser intends to take this to court to force the sale of the land and that I will be liable for their expenses etc. I was of the understanding that part performance doctrine may not be valid in this instance as the intended purchaser has not taken ownership and/or made any improvements to the land and they have simply made a payment that can easily be refunded. Can you please advise?
JJA7 - 27-May-18 @ 1:33 PM
@J - yes, any individual is allowed to change their mind. Just write a letter telling them so.
BG - 24-May-18 @ 10:13 AM
I have verbally accepted and signed an offer letter for the position of psychology and sociology teacher letter.I verbally agreed to the position of sociology teacher.When speaking to the employers again I have been told that the new role will be psychology and health and social care.I do not want to now work for this college as it is not the role I applied for.What do I have to do to reject my acceptance? Can I?
J - 23-May-18 @ 2:04 PM
In March I was offered a job for 9 hours per week in a community service until a CE worker becomes available. I told them I'd have to be guaranteed 9 hours per week at least. The manager ok ed this with the board of management and I started work in April after giving up my previous job. I got a message from the treasurer asking me whats days am I doing.. (set days) I text her back saying a normal week would be Tuesday Wednesday and Friday she said ok.6 weeks later they are trying to write a contract for me saying I'm on flexible 0 contract hours. The manager has confirmed to the chair person that I was guaranteed 9hrs per week and it's till a CE worker takes my position. But treasurer is denying it was discussed with her.. Where do I stand
Nor - 18-May-18 @ 11:09 PM
SophieD - Your Question:
Hello I moved from a company A to a company B in Sept2017. During the very first stges of the interview process I unformed HR that I would go back to France at some point and if company B would accompany me ( I work for international company and from home so where I am physically does not matter at all ). I was told that it was not a problem at all. When I informed. In feb my manager of our intention to come back over summer 2018 she did not raise any concerns and organized a meeting with me and HR to discuss logistics around the transfer of my contract to the French Entity. Since no one ever mentioned a risk that this transfer could not be approved I took all thw necessary steps towards my famili return. I was told last friday that 1 person had decided that I would not be transferred which leave me to choose between keeping my job or following my family to France. I have writen records of people saying how good my job is, and I only have in writing the invite from French HR saying that we will discuss the logistics of my return and a skype discussion with my manager who tells me that I will be given the salary conditions (implying that this is the only thing pending).Is there any chance my case is defendable by law? I feel I have been promised something which ia now not happening and I am forced to resign in order to stay with my family. thanks for your supportSophie

Our Response:
Much would depend upon what was discussed at the time you discussed it with HR and whether it was a 'definite' yes, or a 'dependent' yes i.e dependent upon whether there is a position open to you at the time you apply. Circumstances can change, so it may be unlikely that a definite yes would be given. However, if you feel this is the case and a definite yes was given, then you would have the option is to raise a grievance, please see link here.
ContractsAndAgreements - 15-May-18 @ 1:59 PM
Lymm - Your Question:
Hey I have verbal contract with manager last year going to higher position from junior sous chef to sous chef and pay rise from will take from 4 to 8 weeks still nothing happened and she was transfer to another hotel ?? what can I do?

Our Response:
If the agreement was verbal and she is no longer in charge, there is little you can do if your new manager decides not to follow this through, except perhaps go to your employer directly and ask.
ContractsAndAgreements - 15-May-18 @ 11:57 AM
Hello I moved from a company A to a company B in Sept2017. During the very first stges of the interview process i unformed HR that i would go back to France at some point and if company B would accompany me ( i work for international company and from home so where I am physically does not matter at all ). I was told that it was not a problem at all. When i informed. In feb my manager of our intention to come back over summer 2018 she did not raise any concerns and organized a meeting with me and HR to discuss logistics around the transfer of my contract to the French Entity. Since no one ever mentioned a risk that this transfer could not be approved i took all thw necessary steps towards my famili return. I was told last friday that 1 person had decided that i would not be transferred which leave me to choose between keeping my job or following my family to France. I have writen records of people saying how good my job is, and i only have in writing the invite from French HR saying that we will discuss the logistics of my return and a skype discussion with my manager who tells me that i will be given the salary conditions (implying that this is the only thing pending). Is there any chance my case is defendable by law? I feel i have been promised something which ia now not happening and i am forced to resign in order to stay with my family... thanks for your support Sophie
SophieD - 14-May-18 @ 9:10 PM
Hey I have verbal contract with manager last year going to higher position from junior sous chef to sous chef and pay rise from will take from 4 to 8 weeks still nothing happened and she was transfer to another hotel ?? what can I do?
Lymm - 14-May-18 @ 2:41 PM
Penguin2010 - Your Question:
I had a verbal agreement with a previous manager that I would be paid 5 hours overtime every week as I tend to work 48-50 hours per week but am paid for 40. 8 months ago a new manager came in and the overtime payments stopped. Can I claim this back?

Our Response:
You may be able to claim this back under 'implied contract terms', please see link here. If you had the arrangement in place for a significant time and have not signed a new contract, then you will have a strong case to answer.Applying to your employer directly in the first instance should help.You may wish to speak to Acas if you need more advice.
ContractsAndAgreements - 10-May-18 @ 2:14 PM
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