Is Your Word Your Bond?

Our parents taught us to be people of our word—to mean what we say and say what we mean. For most situations in life, it is enough to give your word to enter into an agreement—from who will take out the trash this week to where to meet for dinner.

But when it comes to the really important things, verbal agreements pose serious risks for confusion, hurt feelings, and financial loss. Gone are the days of doing business with a handshake and a promise. Even in the best of circumstances, with all parties entering into the agreement and acting in good faith, misunderstandings and miscommunication happen and a verbal agreement is simply ineffective.

In this article, we will cover under what circumstances a verbal agreement becomes a verbal contract, what sort of verbal contracts are enforceable, and how to enforce verbal contracts in the Commonwealth of Massachusetts.

What Is a Contract?

A contract is a legally binding agreement. While normally written, a contract may be verbal so long as the spoken agreement contains the essential elements necessary to make any agreement an enforceable agreement:

• An offer: one party suggests terms to another party. The second party may respond with a counter-offer.
• Acceptance: one party agrees to the offer or counter-offer, indicating in words (i. e. “Sounds good. I agree”) his/her agreement. A handshake is not necessary to make the agreement enforceable but can be later used as evidence that an agreement was reached.
• Consideration: in law, “consideration” means that the parties involved each are giving something up as part of the contract, such as exchanging money for goods or services. If only one party makes a sacrifice, it is considered a gift rather than a contract.

Are Verbal Contracts Enforceable?

Verbal contracts are enforceable in Massachusetts, provided that they are not of a type that the Statute of Frauds requires to be written. These include agreements concerning or involving:

• Payment from a person’s estate
• Taking on someone else’s debt
• Consideration of marriage
• Land sales or any interests in land
• Delivery of goods/services/one party’s responsibility more than a year after the making of the agreement
• Even in cases that involve the Statute of Frauds, skilled legal representation can still obtain an “equitable” remedy in court, even if it is not what was exactly promised in the agreement.

For enforceable verbal agreements, the key to success is presenting the evidence and building a clear picture of what was agreed to.

Verbal contracts can be forgotten or misinterpreted, even if all parties involved are acting in good faith. Unless there are witnesses to the agreement, without a written contract, it can be difficult to prove the nature of the agreement. In cases such as these, the court will consider the stories of both parties, determine which party is most consistent and credible, and examine other evidence, such as witness testimony.

Things become more difficult when one party is denying the terms of the agreement, or denying that an agreement took place. Again, it comes down to skilled presentation of the evidence to obtain successful enforcement of a verbal contract.

We Can Help

Our firm has experience in contract litigation. If you are experiencing difficulty in getting what you were promised, we can help. Call our office today to discuss the particulars of your situation.