People sometimes wrongly believe that oral contacts are not enforceable. Oral contracts are just as enforceable as written contracts, but they are sometimes more difficult to prove because there may be no evidence of an oral contract. Here is a little tip to help enforce your oral agreements.
The best way to help enforce an oral agreement is to create written evidence of the oral agreement. This can be done by a short follow-up note after the oral contract is created. This is best illustrated by an example:
Mary painted Dave’s house for $100. Dave thinks that Mary used the wrong color, and Dave wants his money back. Mary believes the color is what Dave selected. Mary and Dave talk it over and agree that Dave will pay Mary $70 to completely settle the dispute by entering into an oral agreement: Dave won’t owe Mary any more money and Mary won’t be liable for anything further. To create evidence of that oral agreement, Mary sends Dave an email after their conversation, which states:
This e-mail confirms our phone conversation on July 2, 2011 where we agreed to the following:
You are paying $70 and won’t owe me any more money. Thus, I am giving up $30 of payment. You are giving up any claims against me. That is, I don’t need to do any further work and I am not liable for any problems you mentioned involving the paint job.
Please promptly correct me if any aspect of this is wrong.
By sending this email, Mary has created written evidence of the oral agreement. If Dave doesn’t respond to that email, his lack of response creates a presumption that he agreed.
So if you find yourself worrying that someone might back out of an oral agreement, confirm the agreement in writing afterward to create evidence of the agreement. If the dispute is ever brought to court, your written confirmation will be evidence of the agreement.
I’m Aaron Hall, a business attorney in Minneapolis, Minnesota. I’m occasionally asked, are oral contracts enforceable in Minnesota?
The answer is quite simple. Absolutely. The challenge comes in with, how do you approve them? Now, sometimes there might be emails or witnesses to a conversation, some sort of proof that the oral contract existed. The other option is to just be and offer your own testimony. You can say, “Look, I was at this event. I was at this location. We had this conversation. There was an offer. I accepted the offer,” or “I made an offer. This person accepted it.” You can give testimony in court as proof of an oral agreement in existence.
Quite simply, oral contracts are absolutely enforceable. The challenge is how do you prove them?
If you have questions, feel free to add them in the section below or go to my Facebook group where you can see if others have asked this question or ask questions yourself.