I’m writing a short blog on this issue, because sometimes otherwise sophisticated clients fail to
understand that they have an enforceable contract, just because it was not reduced to writing, or
was “only confirmed in a text message”.
I recently did a consultation where a client orally agreed to pay money to another party in
exchange for an item of personal property, and thereafter, mentioned that promise in a text
message. After the other party complied with their obligation and turned over the personal
property, the client questioned whether they had to comply with their end of the bargain to pay
because they “didn’t have a contract”. Based on the evidence, they did have an enforceable oral
representation that they would pay, as then confirmed in a text message.
Not all contracts may be oral; some have to be in writing, such as agreements for the sale of real
estate which is subject to the Statute of Frauds, long term leases, and sale of goods $500 or more.
While it is not ideal to have an oral agreement, because they can be difficult to prove and can be
disputed as to the terms, if all of the elements of a contract are present – offer, acceptance, legal
consideration – they may be enforceable.
While putting an important contract in writing can safeguard you against misunderstandings as to
terms, do not assume that oral agreements are not enforceable.