In the United Kingdom, a contract is not required to be in writing to be legally binding. A verbal contract, also known as an oral contract, can be enforceable under UK law provided certain legal requirements are met. That said, verbal contracts can be more challenging to enforce than written contracts, and must satisfy the same core elements:
Contract Requirements
- An offer must be clearly made by one party and accepted by another
- Consideration must be present where something of value is exchanged between the parties such as payment or services
- There must be a clear intention that the agreement is legally binding, rather than a casual or social arrangement
- The terms of the agreement must be sufficiently certain for the court to understand what was agreed
Verbal contracts can arise in everyday and commercial situations whether that is conducted in person or over the telephone. Courts in the UK acknowledge that business deals can be made verbally and will uphold spoken agreements even if they aren’t written down.
However, an exception exists where contracts are legally required to be in writing, making verbal agreements unenforceable. This includes contracts for the sale or transfer of land, consumer credit agreements, deeds, and guarantees.
What are the problems with verbal contracts?
A key problem of verbal agreements is the lack of evidence, which can cause disputes over the specifics of what was communicated and agreed upon. The absence of written terms forces parties to rely on witness evidence, conduct, correspondence such as emails and text messages, invoices, or other supporting material. This makes disputes significantly complex and expensive to resolve.
Verbal contracts also carry a higher level of risk in relation to important high value or long-term arrangements. A short written confirmation can significantly enhance the enforceability of verbal contracts by providing clarity and minimising confusion.
In conclusion, verbal contracts can be enforced in the UK; however, the practicality of the contract largely depends on the ability to prove the agreement and its terms. Written contracts remain the safest and most effective way to protect legal and commercial interests. Therefore, legal advice should be sought where uncertainty arises.
At Nath Solicitors, we provide detailed expert advice on contracts. If you need assistance, please contact us today at 0203 983 8278 or email us at enquiries@nathsolicitors.co.uk.