When it comes to conducting business or making deals, there are various types of contracts that are used to formalize agreements between parties. One of the more common ways to create an agreement is through a written contract, which outlines the terms and conditions of the deal in detail. However, there are also situations where parties may create an agreement through spoken words, without any written documentation. This is known as an oral agreement.
An oral agreement is a verbal agreement made between two or more parties without any written records or documentation. This type of agreement is legally binding, just like a written agreement, as long as certain conditions are met. For an oral agreement to be legally binding, there must be a clear offer, acceptance, and consideration between the parties involved. Additionally, there must be an intention to create a legal relationship, and the agreement must not be against public policy or the law.
Despite being legally binding, oral agreements are often harder to enforce in court than their written counterparts. This is because there is no written proof of the terms and conditions of the agreement, and parties may have different recollections of what was agreed upon. In the event of a dispute, it may be difficult to prove what was said and agreed upon orally.
There are various names for an oral agreement, including verbal agreement, spoken agreement, and handshake agreement. These terms are interchangeable and all refer to the same type of agreement made without written documentation.
While oral agreements can be a useful way to make deals and agreements quickly, it`s important to keep in mind that they come with certain risks. Without written documentation, it may be harder to prove the terms and conditions of the agreement, and disputes may arise. As such, parties should always consider using a written contract instead of relying solely on an oral agreement.
In conclusion, an oral agreement is a verbal agreement made between parties without any written documentation. It is legally binding under certain conditions, but is often harder to enforce in court than a written agreement. Despite its drawbacks, an oral agreement can be a useful way to make deals and agreements quickly, but parties should always consider using a written contract to protect their interests.