07 May Verbal Contract Agreements
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In business and personal relationships, verbal contract agreements are quite common, but they can create several issues. A verbal agreement is a legally binding contract, and it is enforceable under certain conditions, but the key issue is that it is difficult to prove.
A verbal contract, also known as an oral contract, is simply an agreement between two or more parties that is not in writing. It usually involves the exchange of goods, services, or money, and it is made through spoken words. This type of agreement is often used for minor transactions, where a written contract may be impractical or not cost-effective.
Although verbal contracts are legally binding, they can create uncertainties because they are hard to prove. In the event of a dispute, the parties involved may have different recollections of what was said. Moreover, there may be no written documentation to support the agreement, making it difficult for a judge or mediator to determine the terms of the contract.
However, there are specific circumstances where verbal contracts are legally binding. For instance, verbal contracts for real estate, employment, insurance, and other high-value transactions are not enforceable under the law. It is essential to have a written contract to make sure that all parties are on the same page and aware of their responsibilities.
To overcome the uncertainties that come with verbal contracts, wise individuals prefer to have a written agreement. A written contract protects the parties involved by clearly outlining the terms of the agreement, such as payment terms, specific deliverables, deadlines, and conditions for termination.
A written contract is not just for legal purposes but also helps build trust and clarity between parties. It can help to avoid misunderstandings by ensuring that everyone understands what they have agreed to. In the case of a dispute, a written contract can provide a clear record of the agreement and help to resolve the issue without conflict.
In conclusion, verbal contract agreements can be legally binding, but it is always advisable to have a written contract. A written contract provides a clear record of the agreement`s terms and conditions and reduces the uncertainties and misunderstandings that come with verbal contracts. As a result, it helps to foster a trusting relationship between parties and ensures that everyone is aware of their responsibilities.