A verbal construction contract can be enforceable, but it is important to understand the intricacies of the law surrounding verbal agreements. In this article, we will explore what constitutes a verbal contract, how it can be enforced, and the potential risks involved in relying on a verbal agreement.
What is a Verbal Contract?
A verbal contract, also known as an oral agreement, is a legally binding agreement made between two parties without any written documentation. Typically, verbal contracts are entered into in a casual or informal setting and can be made on the spot.
In the construction industry, verbal agreements are relatively common. For example, a contractor may agree to perform certain work for a client without a written contract, but with an understanding of the scope of work and payment expectations.
Enforcing a Verbal Contract
To enforce a verbal contract, the party trying to enforce it must prove that an agreement was made and that there was an offer, acceptance, and consideration. Offer refers to the proposal made by one party, while acceptance is the other party`s agreement to the proposal. Consideration refers to the exchange of goods or services, or a promise to do so.
If a party can prove these elements, the verbal contract can be enforced in court. However, it is not always easy to prove the existence and terms of a verbal agreement. Without written documentation, disputes can arise over the exact terms and scope of the agreement.
Risks of Verbal Agreements
There are several risks associated with relying on verbal agreements, especially in the construction industry. Without written documentation, it can be difficult to prove the terms and conditions of the agreement, leading to disputes and legal battles.
In addition, verbal agreements may be subject to the Statute of Frauds, which requires certain contracts to be in writing to be enforceable. However, there are exceptions to this rule, such as when the contract has been partially performed or when there is clear evidence of the agreement.
In conclusion, verbal construction contracts can be enforceable, but they come with risks. It is always recommended to have a written contract in place to avoid any misunderstandings or disputes down the line. However, if a verbal agreement is made, it is important to carefully document the terms and conditions of the agreement and keep records of any payments or work performed. By doing so, the risk of disputes and legal battles can be minimized.