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Be Wary of Oral Business Transactions

Jan. 18, 2021

Businesses can face a number of legal issues, with many of them pertaining to contracts. While the best way to avoid contractual problems is to competently negotiate and draft them in the first place, even well written agreements can lead to conflict when the parties don’t live up to their obligations under the contract’s terms. But what about verbal agreements? Can those be deemed legally enforceable? These are questions that many small business owners have when they’ve been operating on word of mouth and something goes wrong.

Can a Verbal Promise Be Enforced?

It really depends on the facts of the case. While verbal promises are typically deemed unenforceable, there may be circumstances when a court would find them to be equivocal to a contract. Here are some of the characteristics that may cause a verbal promise to be deemed legally enforceable:

  • An offer was actually made, meaning that some sort of bartered for exchange was engaged in with realistic terms

  • You’ve had a history of conducting business based on verbal agreements with both parties consistently living up to their obligations under those verbal promises

  • One party detrimentally relied on the promise, meaning that the party actually relied on the promise and that reliance caused some sort of financial harm

These matters are rarely, if ever, black and white, which means that the facts of your particular circumstances could make all the difference. That’s why it might be best for you to consider seeking out an aggressive advocate who can help you either build your case as a plaintiff or defend yourself.

Don’t Leave Anything to Chance

If you’re finding that your conducting a lot of business based on verbal promises, then you might want to consider formalizing your business operations before you run into issues. Legal professional who are skilled at negotiating and drafting these agreements can assist you so that your business interests are as fully protected as is possible. That way you’re not leaving yourself and your business susceptible to legal action or a bad business deal. To learn more, consider reaching out to an experienced firm like ours.