UK Template Agreements and Sample Contracts
+44 (0)208 1441 123
support@templateagreements.co.uk
Twitter
0
Product was successfully added to your cart

Basket

  • Amendments
    • Amendment to Agreement
    • Termination of Agreement
  • Finance & Investment
    • Call Option Agreement
    • Loan Agreement
    • Partnership Agreement
    • Put Option Agreement
    • Shareholders Agreement
    • Subscription Agreement
    • Tenancy Agreement
  • Notices & Letters
    • Breach of Contract Notice
    • Letter Before Action
  • Trade & Operations
    • Director Service Agreement
    • Employee Handbook
    • Employment Contract
    • License Agreement
    • Master Services Agreement
    • Non-Disclosure Agreement
    • Settlement Agreement
    • Zero Hours Contract

Is a verbal contract binding?

02/06/2018Charles Törnros

The idea of a verbal contract is one that causes plenty of debate, even in the higher legal echelons. Doyen of the daytime TV legal world Judge Judy is fond of telling her millions of viewers that a contract requires just three things, intention, offer and acceptance. With these in place, the contract is formed, and it doesn’t have to be written down. On the other side of the coin, lawyers throughout the land are fond of misquoting Samuel Goldwyn and saying a verbal contract is not worth the paper it’s not written on.

So who is right? Can you rely on a verbal contract? And if so, why do you need a written one?

Enforceability

First, the positive news for those in the Judge Judy camp. According to English contract law, a verbal contract is as legally binding as a written one. There are some exceptions, however. An employment agreement, anything concerning land transactions or a guarantee are three examples of contracts that need to be set forth in writing.

But in a general commercial transaction, a verbal contract is still a contract. Let’s take a simple example. If you have agreed to cut your neighbour’s grass twice a month and he has agreed to pay you £25, then there you have all the aspects for a contract. If three weeks go by and you have failed to cut the grass, you are in breach. And if the neighbour doesn’t pay you, or he only pays you £20, then he is in breach. Or is he?

Clarity

The problem with a verbal contract is that in the case of a dispute, it can be a case of “he said, she said.” Let’s look again at the above example. You might both agree that the terms of the contract were “cut the grass twice a month for £25.” But perhaps you will argue that leaving it for three weeks is no problem, as long as it is cut twice in the calendar month. Alternatively, the neighbour might say you left an area to the side of the house uncut, which is why he only paid you £20.

Who is right? With a written contract in place, aspects like these would be ironed out and clarified up front. Any assumptions that either party would be making, whether “twice a month” means every two weeks or, indeed, whether the month in question is a four week period or a calendar month would become evident, and any misunderstandings ironed out.

Get it in writing

Of course, nobody is actually suggesting that a “grass cutting contract” is a necessity between neighbours, but when something as mundane can lead to so much ambiguity, it becomes evident that diving into a more complex commercial transaction without a written contract in place is a recipe for disaster.

The main purpose of a contract is to achieve clarity between parties to reduce the likelihood of a future dispute. There is no better way of doing that than to get everything in writing. After all, Judge Judy might make for good TV entertainment, but none of us want to face her for real.

No sign-ups or subscriptions
Honest user
reviews
Up-to-date documents
Fast, secure payment
Edit
Print
Sign
Edit

All of our template agreements come in an easily editable format (.doc) and contain highlighted sections with helpful notes so that you can customise certain clauses to suit your particular circumstances.

Print

Once you have customised your document using our helpful highlights and notes, just hit print or save to PDF and you are ready for signing.

Sign

Simply sign the document along with the other parties and you have a professionally-worded, legally binding agreement.

Articles and resources

  • Handling Redundancies in a Small Business 02/06/2020
  • Acquisition Due Diligence Checklist 01/05/2020
  • 20 Random Ideas to Boost your Sales 07/01/2020
  • How to take your startup to the next level 16/09/2019
  • Tips for buying a business 19/03/2019
  • Establishing terms and conditions of business 21/02/2019
  • Dispute resolution tips for a small business 04/02/2019
  • What to do if your tenant wants to leave early 20/01/2019

Ready for your questions




Here if you need us

Plus Street Ltd,
Kemp House,
160 City Road,
London EC1V 2NX,
United Kingdom
+44 (0)208 1441 123
support@templateagreements.co.uk

Sharing the love

Twitter

The UK’s most popular

We are the UK's most popular vendor of template legal agreements, trusted by thousands of businesses every year.

Our templates are the cheapest of any available and, with the help of a leading UK law firm, the best quality too! Learn more here.

  • About us
  • Articles and Resources
  • Sample Agreements
  • Terms and Conditions
© 2015-23 Plus Street Ltd
Incorporated in England and Wales 09064120

We use cookies to ensure you get the best experience on our website. Click to learn more.