We all have entered into a verbal agreement among friends, family and/or even a stranger at one time or another, where we relied on the good faith of all parties for the agreement to go smoothly. The common reasons for entering into a verbal agreement is because the party believed the risk was considered low at the time, is acquainted with the other party, the other party appeared to be a good bloke, and not seeking advice before entering into the agreement. Hopefully in your case the transaction was successful, however many people are now facing costly and difficult disputes due to verbal and/or poorly prepared written agreements. Quite often written agreements are very unclear which creates difficulty for the courts in trying to determine the parties intention. Sometimes critical terms of the agreement are missing such as the name or entity of the party to the contract, the amount to pay, when to pay it , what happens if one party defaults on the agreement. If the verbal agreement is too vague, it can be void for uncertainty.
As a general guide verbal contracts can be just as binding as a written agreement and can be held up in a court, however the difficulty is proving what was agreed.
In some cases you may find it not necessary to have a detailed written agreement, especially if the value of the transaction is low and/or you have a document that still protects your interests, for example a quote or tax invoice.
Verbal agreements can be substantiated by the conduct of all the parties, specific actions, and previous dealings. Despite this it is preferable to have an agreement in writing.
Should there be a dispute regarding a verbal agreement you may have the following options:
- Talk to the other party and see if you can negotiate a solution. If you reach an agreement, put it in writing.
- Seek legal advice about alternative ways to resolve the dispute.
- If you cannot solve a dispute, contact a specialised Dispute & Commercial Litigation Lawyer to work to enforce your rights under the agreement.
Attwood Marshall Lawyers specialises in Dispute & Commercial Litigation in both Queensland and New South Wales.
If you have a breach of agreement or cannot solve a dispute, do not hesitate to contact us.
We can also provide assistance for drafting or obtaining legal advice before entering into an agreement.[AM_MOREINFO]