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What You Need To Know About Using Verbal Agreements

14 September 2016 by Kenneth Pierce

It's a common misconception that verbal agreements are not enforceable and/or can't be proven in court. While it's true your case would be stronger if you had a written contract to back up your claim, verbal contracts are just as valid. However, verbal contracts differ from written ones in a few key areas that you need to know about if you want to have a legal leg to stand on should you need to take someone to court.

Only Goods and Services Allowed

Possibly the most important aspect about verbal contracts is they can only be used to secure goods and services. For instance, a verbal agreement with someone to pay for repairs to your damaged vehicle would be considered a legal and binding contract. However, agreeing to make a statement to an insurance company would not, because no one is buying or selling anything.

Maximum Monetary Limit Applies

Verbal agreements can only be made for goods and services under a certain dollar amount. This is required by the Uniform Commercial Code which states written contracts are mandatory for goods and services over $500. Therefore, a verbal contract for the sale of something for $1,000 would not be enforceable.

However, some states do make exceptions. In Connecticut, verbal agreements for items over $500 are enforceable if buyers have accepted and already paid for them. Other states may have more limitations or exceptions. It's best to look up the relevant laws in your state to determine what they are.

Shorter Statute of Limitations

Another thing that may surprise many people about verbal agreements is they may be subjected to a shorter statute of limitations. The statute of limitations is the length of time the law gives a person to pursue legal remedies for injuries or damages he or she sustains. For instance, in Alabama, you have six years to take legal action if someone breaches a written contract.

However, in many states, the statute of limitations is shorter for oral contracts. In California, the limit is four years for written contracts, but litigants only get two years to seek legal redress for breaches of oral contracts. If you don't sue for damages within that time period, you will be barred from bringing a case to court forever.

A verbal agreement can be a quick and easy way to contract with someone for goods and services. It's essential that you obey all the requirements associated with these types of contracts to ensure your agreement is enforceable in court. For more information about verbal contracts or help with litigating a case, contact a personal injury attorney like Loughlin Fitzgerald P C.

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