Written Contracts Are Not Always Required
A contract doesn’t have to be in writing to be enforceable. If someone extends an offer and the other person indicates acceptance—verbally, with a thumbs-up, a nod, or even by simply performing the requested work—a contract exists. If Sally says, “Paint my house Friday for $500,” and you show up and paint it without saying a word, you’ve accepted her offer through performance.
The Statute of Frauds: When Writing Is Required
Certain categories of contracts must be in writing under what’s called the statute of frauds. These include contracts that take more than a year to perform, real estate transactions, and several other specific categories. If your agreement falls into one of these categories, a handshake or phone call won’t cut it—you need it documented in writing to be enforceable.
What Happens When Price Is Missing
An offer generally needs to be sufficiently detailed for acceptance—and price is usually a key term. But missing a price doesn’t always kill the deal. Under the equitable doctrine of quantum meruit (Latin for “the value of what was provided”), you can still recover the reasonable value of your work. And if the price is publicly known—like commodities traded on an exchange—courts may enforce the contract even without a stated price.
Protect Yourself: Put It in Writing
The fact that oral contracts are often enforceable doesn’t mean you should rely on them. Phone calls, handshake deals, and verbal agreements create ambiguity about exactly what was promised. Written contracts eliminate disputes over terms, protect both parties, and give you clear evidence if enforcement becomes necessary. The cost of drafting a simple written agreement is trivial compared to litigating what someone said on a phone call.
Video Transcript
Are Written Contracts Always Required?
Business owners have a goal of making sure that their contracts are enforceable. But the problem is, what if they are oral? What if they are not in writing? Or what if it is a thumbs up? You know, like, “Hey, I will paint your house for $500,” and the homeowner says (thumbs up). Is that gesture enough? Because it is not in writing. It is not even orally spoken.
Enforceability of Contracts: Oral and Non-Verbal Communication
So the problem is, how do you know when a contract is enforceable? Well, the good news is the law is very clear on this. If a person extends an offer and the other person indicates an acceptance of that offer, then there is a contract. It doesn’t matter if it is in writing. It doesn’t matter if it is spoken or not. A thumbs-up is enough. In fact, if Sally said to me, “Hey, Aaron, if you want to come paint my house on Friday, I will pay you $500,” and I look at Sally and I give no response and I walk away. But on Friday, I show up and I paint her house. I have accepted her offer through my performance. So as a result, there is a contract. The law does not require a contract to be in writing to be enforceable. It can be oral. It can be a gesture. It can be a nod. It can be some sort of performance like performing on the request in the offer.
Exceptions to Enforceability and Detailed Offers
Now there are some exceptions to this. Here are some of the big ones. Certain sorts of contracts have to be in writing under what is called the statute of frauds. For example, a contract that takes more than a year to perform or a transaction in real estate and a number of others that you can see by looking at the statute of frauds. We will put a link in the description below for an article on the statute of frauds so you can see which sort of contracts must be in writing.
Offer Details and Legal Doctrines
What are some other exceptions? Well, an offer needs to be sufficiently detailed for it to be accepted. For example, if you leave out the dollar amount, usually that means that there wasn’t sufficient detail in the offer. For instance, if Sally said, “Hey Aaron, I will pay you if you come to my house and paint it on Friday.” Well, if I come and paint the house on Friday, there is a question. What amount did she agree to pay me? Can she get off without paying at all? No, there are other legal doctrines that apply in that situation. These are doctrines in equity: it would be potentially promissory estoppel. Quantum meruit is probably the most likely legal doctrine that would apply because even though there is not a contract that is enforceable, under the equitable doctrine of quantum meruit (that is a Latin term), she would still have to pay.
Quantum Meruit and Known Pricing
Quantum Meruit
Quantum means quantity, or the volume and quality, but generally quantity is what quantum means. And meruit means the value or the merit of what is provided. So whatever the value of the paint job is that I provided would still need to be paid.
But there are scenarios where even if the price is missing, the contract would still be enforceable. So not under quantum meruit, but it would be an enforceable contract. Here is an example. Let’s say pork bellies. The price of them is listed on a public exchange or index. So everybody knows what pork bellies are every day, and we are talking about the bellies of pigs, but I am using this example because it is real. Pork bellies are traded on a daily basis. And there is some standard pricing around that. So if I said, “Hey, if you deliver 1,000 pork bellies to me on Friday, I will pay you.” And the person delivers a thousand pork bellies. Well, the price is known because it is a publicly listed price. So it wasn’t important in that scenario for the price to be communicated in the offer because it was essentially known or implied through the offer.
Contractual Detail and Illegal Offers
So you have to have sufficient detail for an offer to be accepted by another party. There are some other exceptions where an offer would be accepted, but the contract would not be enforceable. There might be some other issues there. They are more minor examples. I will give you one example. If somebody said to me, “I will pay you a thousand dollars to kill my ex-spouse,” and I said, “I accept,” is that contract enforceable? No, because it is illegal. And any contract to do something that is illegal is not enforceable.
Conclusion
So there are some extreme exceptions there, but going back to the general question, are written contracts always required? No. Contracts can be oral. They can be communicated in many different ways: emails, etc. There is no requirement that a contract be in writing unless it is the type of contract listed in the statute of frauds.
All right. If you haven’t already subscribed at aaronhall.com/free, you are welcome to check out our channel where we have all sorts of other questions from business owners and the answers provided to you. I do these videos as a public service, as a way to use my knowledge as a licensed attorney to help business owners avoid problems, spot issues to discuss with their attorneys, and improve the likelihood that you will have a successful company and successful life. It is great being here with you today.