Laws of Verbal Agreements

As a professional, I have come across many articles and blogs that discuss the importance of written agreements in business dealings. However, verbal agreements also hold a significant place in the world of business, and there are laws that govern them. In this article, we will discuss the laws of verbal agreements.

What is a verbal agreement?

A verbal agreement is an agreement made between two parties without any written documentation. Verbal agreements could be as simple as agreeing on a meeting time or as complex as agreeing on a business deal. Verbal agreements can be binding and enforceable, but in some cases, they can be challenging to prove.

The four elements of a valid verbal agreement

For a verbal agreement to be valid, there are four essential elements that both parties must agree to. These elements include:

1. Offer: One party must make an offer to another party.

2. Acceptance: The offer must be accepted by the other party.

3. Consideration: Both parties must benefit from the agreement.

4. Intent: Both parties must have the intent to enter into the agreement.

Once all of these elements are present, a verbal agreement can be enforceable.

When can a verbal agreement be enforced?

In some cases, verbal agreements can be enforced, while in others, they cannot. The enforceability of a verbal agreement depends on the state laws and the nature of the agreement. For example, some types of agreements that must be in writing include contracts for the sale of land, long-term contracts, and contracts that cannot be performed within a year.

What are the risks of verbal agreements?

As mentioned earlier, verbal agreements can be challenging to prove. If there is a dispute between the parties, there may be no evidence to support one side or the other. Additionally, verbal agreements are subject to misinterpretation, misunderstandings, and memory lapses. It is always best to have any agreement in writing to avoid these risks.


Verbal agreements can be just as valid as written agreements, but they also come with their own set of risks. It is essential to understand the laws that govern these agreements and to ensure that all parties fully understand the terms of the agreement. When in doubt, it is always best to have any agreement in writing to protect all parties involved.