In principle, it is desirable that all important contracts, such as . B a cash loan to a friend, be recorded in writing. Even if you have a legally binding oral contract, proof can become a problem. If it is necessary to initiate legal proceedings for the performance of an oral contract, you will have to prove the contract in the Court of Justice. This may be a “he said they” fight between the parties. There is no better proof of the terms of a contract than a written contract signed by all parties. Although oral agreements are binding under English law, the cost, stress and energy you have to spend to prove that the terms of an oral contract will probably be more effort than it is worth it. If you invest time and money in a properly drafted contract, you can be sure that your agreement is robust and applicable. Without a written agreement, it is often the word of one party against another. We therefore recommend avoiding oral chords. However, if you enter one, we advise you to send an email or letter to the other party confirming the agreed terms. The more written documentary evidence you have, the better your chances of obtaining oral agreement.
It is dangerous to think that a handshake agreement is a done deal. But it is also dangerous to think that an oral agreement will not be binding. The only way to be sure that you have a binding contract is for a written contract to be written by lawyers. Oral agreements are about the fact that it can be very difficult to prove their existence and to prove what the agreed terms are. There are also problems with the parties who have different memories of what has been agreed, or some may be wrong about the terms of the oral agreement. Although the aunt can prove that she lent money to her nephew with bank statements showing that $200 was transferred to her nephew on the day in question, she still has no physical evidence that he agrees to repay. He might even deny making such a promise (by perjuring himself). Sometimes an oral agreement is reached and the parties intend to record the conditions later in a document, but for whatever reason, this has not been done. However, the oral agreement remains binding. Clients often think that oral agreements are not binding. However, as a general rule, the law considers oral agreements to be legally binding.
Although there are some exceptions (for example. B transaction agreements between employers and employees or agreements for the sale and purchase of land), oral agreements may be applicable. If you reach an oral agreement, it is helpful to write down the terms of the agreement reached in an attempt to avoid the problems below.