The slides emphasized that verbal contracts can technically be valid, but most commercial agreements in our field must be written due to complexity and legal risk.
Still, early partnerships and collaborations often start with verbal commitments.
Do you think verbal agreements have any place in the medical device industry, or should everything—no matter how small—be in writing from the start? I guess written contracts are safer!
Please share your opinion. Thank you!
Verbal agreements can be acceptable when there is evidence to support that one or both parties were providing services and benefiting each other. Records such as emails, meeting minutes, or purchase orders can be used to enforce a verbal agreement. A verbal agreement is more credible when the parties involved are legally capable of participating in it and when all the activities involved are lawful. Nonetheless, I agree that written contracts are the safer option. A company can have a basic NDA form that is available for use and can be edited if necessary. Verbal agreements cannot be enforced if the sales exceed the legal limit or if they span over the course of many years. I do think verbal contracts have a place in the medical device industry. They are likely to occur between parties that have collaborated before or have a strong level of trust, and the chance of legal action is lower due to the low stakes, i.e., clear expectations, maintaining records, minor dealings, and a short timeline.
While in some industries verbal agreements can work for small, low risk situations, when it comes to the medical device industry I really don’t think they have any place or credibility due to the strict compliance environment and the severe consequences for misunderstandings or misinterpretations.
Verbal agreements create three big problems:
1. No documentation for regulators.
Agencies like the FDA expect clear, traceable records. If there’s no written proof of what was agreed on, it becomes extremely difficult to demonstrate that an interaction was compliant and not a hidden form of influence or compensation.
2. Too much room for miscommunication.
Even seasoned professionals can walk away from the same conversation with very different interpretations. In a regulated industry, that level of ambiguity can derail projects or trigger investigations.
3. Lack of protection for both parties.
Written agreements protect not only the company but also the clinician or consultant. If anything is questioned later, a signed document becomes proof of legitimate intent.
That said, verbal communication does still happen but only becomes credible/traceable as long as it is followed by written confirmation (email summaries, updated contracts, formal approvals, etc.). In other words, discussions can start verbally, but commitments should never stay verbal.
What do you think: are there any situations where a verbal agreement would still be acceptable, or is it simply too risky across the board?
In my opinion, no verbal agreements should be taken as seriously as written agreements. There is no sense of commitment from either party. In reality, they are dangerous. Everything should be written and both sides should agree and sign to the terms so that each side knows what they are getting themselves into. For example, human error will always occur in the case of verbal agreements without a written contract. Human error transfers to all facets of life. For example, Person A says they will be at a location in 15 minutes. Person A implies that Person B will wait 5 minutes if they are late or hit traffic. Person B is strict on time and will leave after 15 minutes, since it is the expected time. Person A ends up being 5 minutes late and Person B is gone. This same case can occur and is actually relatively common not only in company settings but just in general. People have different terms, requirements, and tendencies. Verbal agreements in some cases could mean nothing to one side but be serious for another side. It is crucial that written agreements are formed as a means of formality when it comes to the actual agreement.
I don’t believe verbal agreements should be common in the medical device industry, and in most cases, they should be avoided. While there may be some situations where verbal commitments are practical, such as early-stage discussions before formal documentation is prepared or decisions made during internal meetings, they should never replace written records. Verbal agreements are risky because they lack the formal documentation required for FDA compliance and cannot be audited during inspections. They also open the door to misunderstandings, as different stakeholders may recall conversations differently. Given the high stakes of patient safety and regulatory oversight, medical device companies need defensible documentation for every key decision. Verbal agreements may help during preliminary conversations, but they should serve only as temporary placeholders until formal contracts are put in place. Relying on written agreements supports compliance and promotes transparency in the medical device industry.
While verbal agreements can occur naturally in early conversations or iterations of a project, they shouldn't be treated as binding in most capacities, especially in the medical device industry. The level of regulation, document, and potential liability make it too risky to be relied on in this capacity. Additionally, in an industry where documentation is essential and there is an extensive history on everything being worked on, having verbal confirmations and agreements does not fit well. It COULD be used as a starting point, where teams talk through ideas and outline the collaborations, but once there is any exchange of resources or intellectual properties, then there needs to be formal writing or contracts.
One thing I don’t think has been brought up yet is how verbal agreements become risky simply because people change. Teams shift, managers leave, and projects get handed off. Without written documentation, the original intent of a verbal agreement can disappear.
In the medical device industry, where projects can span years and involve cross-functional teams, relying on verbal communication creates huge gaps in organizational memory. Even if both parties were completely aligned at the start, anyone who joins the project later has no record of what was promised, why decisions were made, or what boundaries were originally set. That confusion alone can create compliance issues, even if the agreement was harmless.
So for me, verbal agreements aren't just risky because of regulators or miscommunication, they're risky because they don’t survive turnover. Early conversations can absolutely start verbally, but anything that affects timelines, resources, or responsibilities needs to be written so the agreement still holds up long after the original people aren’t there.
Do you think companies should have a formal process for documenting (even small verbal decisions), just to avoid this loss of context?
Verbal contracts do have their place in the field, but shouldn't be realized on too heavily. As was mentioned, verbal agreements have a lack of traceability, which is important in compliance with regulatory agencies. A lack of a paper trail can be a problem later on in the development pipeline if documentation is missing about why a certain decision was made. One of the larger problems with verbal agreements is the speed at which an agreement can be reached. Paper contracts force the parties involved to process their expectations and write them on paper. Since verbal contracts can emerge much quicker, maybe the expectations were not outlined, or misunderstood, which can cause conflicts. Paper contracts avoid this issue as both parties can outline their expectations and scope of work.
Verbal agreements still play a role in early conversations, but they’re best viewed as relationship-building tools rather than anything that should carry operational or legal weight in the medical device industry. Early-stage collaborations often begin with verbal alignment—agreeing to explore a concept, share non-sensitive information, or draft a proposal—but once the interaction touches anything with real consequences (IP ownership, data sharing, study responsibilities, payment, timelines, regulatory obligations), relying on verbal commitments becomes risky for both sides because memory, interpretation, and intent can drift even when everyone acts in good faith. The complexity of device development, the number of stakeholders involved, and the regulatory expectations around traceability and responsibility make written agreements almost a necessity as soon as anything substantive is discussed. So verbal agreements do have a place as a soft starting point that signals interest and builds momentum, but they should never be treated as binding; in this field, even small actions—prototype evaluations, preliminary data exchange, early advisory input—can have outsized consequences, and documenting them early protects both partners and preserves clarity. In that sense, you’re right: written contracts aren’t just safer—they’re part of functioning responsibly in a highly regulated environment.
I think verbal contracts can be highly dangerous if taken as is even if recorded. As mentioned earlier in the discussion, I agree that they should be used strictly as a tool to initiate contact between companies. In order for anything to be held to legal standards, there should be official contracts on pen and paper and explained in clear detail including updates and revisions to the contract along the way. It's vital to maintain a paper trail for anything that can be interpreted as an agreement and even a contract. If one party is unsatisfied with the other's work or contributions, I think they must have some form of documentation to review the reality in the situation. I think verbal contracts can be helpful for quick in the moment conversations, but nothing that should be interpreted as a legally binding. The contract verbally agreed upon can so easily be forgotten or misinterpreted even after a week by either one or both parties, so it is vital that anything legally binding is written clearly with no room for misinterpretation.
