How Binding is a Verbal Agreement?
There is no legal difference between an agreement that has been put in writing and a verbal agreement. The act of writing doesn’t make an agreement more legally binding than merely speaking it, as the pen and paper ads no legal magic. As long as a verbal agreement is reasonable, fair, not against the boni mores (values and morals of a community) and made in good faith, it is generally just as binding as a written agreement.
HOWEVER – Legality and executability are two VERY different things. Simply speaking your agreement into the wind with no paper trail (or WhatsApp/email trail) is a very bad idea. Oral agreements are nearly impossible to prove and leave way too much room for doubt and uncertainty.
Without a written and agreed upon, signed document to present in court, the court will have to rely on the testimony of the two contracting parties…and seeing as the matter has made it this far without resolution, it is clear that these parties won’t be agreeing with each other.
This leaves the presiding officer with a difficult situation and very few ways out of it. Without the impartial direct testimony of a third party who perhaps was witness to the spoken word agreement, the presiding officer will have nothing to rely on, but the two contradicting versions presented by the contracting parties.
What can the outcome be?
Best case scenario – The presiding officer finds in your favour (sort of). This will leave you with a slightly unfulfilling outcome, and a large legal fee to pay.
Worst case scenario – The presiding officer will rule in favour of the other party (to some extent) and you will have an even larger fee to pay.
Regardless of the outcome – it won’t be clean, easy to obtain or satisfying.
What should I do?
With the advent of the electronic age, recording agreements has become easier than ever.
There is no excuse for not having some record of the terms to which both parties agreed. WhatsApp messages, emails, voice notes, automatically recorded phone calls, and even things like security camera footage can be used to determine the terms on which you agreed, or at least to remove some of the doubt and uncertainty around a verbal agreement.
It’s Not Too Late
Do you have outstanding agreements with customers that you do not have any record of?
Take action now, before things get messy, and just send a follow-up email or WhatsApp, confirming some of the basic terms of the agreement.
Timeframe, deliverables, the scope of work and payment structure…all those little things that might come back to bite you when things don’t go according to plan…
The best advice however still remains: Put it in writing!
