A common question in contract law is “Are oral agreements enforceable?” The simple answer is that they can be.
A contract exists when there is an agreement between two or more parties that consists of:
(1) an offerby one party (offer is defined as: an expression of willingness to contract on a specific set of terms, made by the offeror with the intention that, if the offer is accepted, he or she will be bound by a contract); and
(2) acceptanceof the offer by the other (acceptance is defined as an expression of absolute and unconditional agreement to all the terms set out in the offer. It can be oral or in writing. The acceptance must exactly mirror the original offer made).
(3) All contracts require a “meeting of the minds”. A meeting of minds occurs when all parties agree to the material or important terms and conditions of the deal. Usually, this means that if major points such as price are not agreed upon, there is not a binding contract. On the other hand, if the major points are agreed upon, the need to work out minor details or specific contract language may not prevent a meeting of the minds.
So basically, if your oral agreement contains an offer, acceptance and there has been a meeting of the minds, the oral agreement can constitute a valid and enforceable contract.
The difficulty with lawsuits involving oral agreements is the difficulty in proving that there actually was an agreement. When I contract is written, it is generally easy to prove. They only issues to be decided are (1) was the written contract breached and (2) what are the damages. However, oral agreements need to be proven through the testimony of the parties and any witnesses. Additionally, other evidence can be utilized to prove that there was actually a contract.
For example, if enter into an oral agreement with an auto mechanic wherein he agrees to fix your non-functioning a/c unit in exchange for $100, and you pay him the money and leave the car with him at his shop only to pick it up the next day to find that he did not do the work, this may constitute a breach of an oral agreement. Since there is nothing in writing, the question is how will you prove that there was a contract?
Let’s assume that the mechanic claims that you never paid him and that no agreement ever existed. You can testify in support of your claim and call witnesses who may have knowledge of the agreement. So, if your sister had to bring you home from the mechanic’s garage after you dropped the car off, she could be a witness on your behalf. With her testimony you may have a better chance of proving your claim.
In conclusion, oral agreements that contain all of the elements of a valid contract are enforceable even though they may be more difficult to provide than a breach of a written contract.