Oral Agreements

Definition

Oral agreements are contracts that are spoken and not written down. They can be just as binding as written contracts, but they can be harder to enforce because proving their existence and specific terms can be challenging. These agreements often rely on the memory of the parties involved and can lead to disputes if there are disagreements about what was said.

5 Must Know Facts For Your Next Test

1. Oral agreements are legally binding unless they fall under categories that require a written contract according to the Statute of Frauds.
2. Disputes over oral agreements often hinge on credibility and evidence since there are no written records to verify terms.
3. Certain exceptions allow oral agreements to be enforceable despite the Statute of Frauds, such as when one party has partially performed their obligations.
4. The Parol Evidence Rule can come into play if a party attempts to introduce an oral agreement as evidence in a dispute over a written contract.
5. In some cases, oral agreements can be integrated into written contracts if the parties later decide to formalize their understanding.

Review Questions

• How do oral agreements interact with the Statute of Frauds, and what exceptions might apply?
  • Oral agreements generally must be in writing to be enforceable under the Statute of Frauds for certain types of contracts, like real estate transactions. However, exceptions exist; for example, if one party has begun performance under the oral agreement, courts may enforce it despite its lack of written form. These exceptions highlight that while oral agreements can have legal standing, their enforcement can depend on specific circumstances surrounding each case.
• Discuss how the Parol Evidence Rule affects the enforceability of oral agreements when there's a conflict with a written contract.
  • The Parol Evidence Rule limits what evidence can be considered in court regarding a written contract. If an oral agreement contradicts a final written contract, that oral evidence is typically inadmissible. This means that even if parties had prior discussions or agreements verbally, once they put their final agreement in writing, those earlier oral discussions cannot alter or change what is explicitly stated in the written document.
• Evaluate how courts determine the validity and terms of an oral agreement in situations where evidence is scarce or conflicting.
  • When courts assess the validity and terms of an oral agreement amidst scarce or conflicting evidence, they primarily rely on witness credibility and any corroborative details available. Courts may consider the context in which the agreement was made, including relationships between parties and conduct following the agreement. This process can lead to varying outcomes based on how convincingly each party presents their account, ultimately affecting whether an oral agreement is upheld.

Related terms

Statute of Frauds: A legal doctrine that requires certain types of contracts to be in writing to be enforceable, such as contracts for the sale of real estate or agreements that cannot be performed within one year.

Express Terms: Specific terms and conditions that are clearly stated either orally or in writing in a contract, detailing the obligations and rights of the parties involved.

Implied Contracts: Contracts formed by the actions or conduct of the parties involved, rather than through explicit verbal or written agreement.