An oral agreement can include forms of oral agreement and a written contract. A verbal agreement is made without a formal written documentation. While the agreement is there and understood in spoken words it's more difficult to prove in court. There may be instances where the written contract is necessary, for example in sales or transfer of real state, in agreements related to marriage or divorce, etc. Without documentation of an agreement, it becomes a matter of who said this and that. Sometimes, there are family disputes because of verbal agreement, they want to avoid the awkwardness between family members or close friends because by requesting a written contract it makes it look like one party doesn't trust the other. I've seen cases where family members agreed to buy a good and pay some amount of money for it for a certain period of time, however, it did not happen like that and the family went through a dispute that caused hiring lawyers. Cases like this do not end up in happy endings, so I would say to go with the written agreement is safer.
A critical thing to note about a verbal agreement is that it often comes with a paper trail and can have many forms of evidence to back it up, despite it being "verbal" in nature. Verbal here simply means that there was no formal contract written for the agreement.
For example, there can be a verbal agreement to sell a house for a certain amount that a buyer agrees to, even though a written agreement has not happened yet.
Types of evidence to back up that a verbal agreement are - letters, emails, texts, quotes, faxes, notes made at the time of the agreement, or proof of payment such as canceled checks or transaction statements. Thus all though there was no written contract between the parties, all these pieces of evidence are considered a "verbal agreement".
The difference between the verbal agreements and written agreements is that the written agreement is definitely easier to create, understand, and can be used as a proof to prove to someone or in court when there is a disagreement. While with the verbal agreement, both parties are depended on the words being said to each other and third party can be there as a witness. However, whenever there is a disagreement it is difficult to prove the honest and loyal agreement unless it was recorded. In my opinion, a written agreement is a better and official agreement to have with other parties.
A verbal agreement is an agreement that all parties agree on without it being written and signed. An example of this would be haggling to lower the price on a product or committing to do something while in a conversation. There can be paper trails that lead up to this point, but the final agreement is done verbally and not in writing. As a result, these types of agreements can be tough to defend in court should a dispute arise because there is less legitimate evidence about the agreement that can be used. Written agreements, however, are much easier to defend should a dispute arise because all the facts are there on paper. These types of agreements are also much more official and should be practiced at all times, since they can really make a difference such as in a case where you could lose your rights over a multi-million dollar idea but having that written agreement is just the evidence you need that you have ownership and rights over it. The only way for a verbal agreement to mean as much as that, is if the verbal agreement was recorded.
I agree with most replies here, which finds a written business agreement the better option in a project, compared to the verbal agreement, as it and can be easily defended in court and would provide more certainty by stating the details clearly. Depending on someones words and honesty would not always work and could cause some later issues which can be avoided if there were a written statement. Here are some benefits for the written agreements found on Pendragon website:
"A written contract can:
• provide proof of what was agreed between you and the hirer
• help to prevent misunderstandings or disputes by making the agreement clear from the outset
• give you security and peace of mind by knowing you have work, for how long and what you will be paid
• clarify your status as an independent contractor by stating that the contract is a ‘services contract’ and not an ’employment contract’. This will not override a ‘sham’ contract, but a court will take the statement into account if there is any uncertainty about the nature of the relationship
• reduce the risk of a dispute by detailing payments, timeframes and work to be performed under the contract
• set out how a dispute over payments or performance will be resolved
• set out how the contract can be varied
• serve as a record of what was agreed
• specify how either party can end the contract before the work is completed."
I think we need to first understand that both verbal and written agreements are recorded in some manner or the other. So both can be used and defended with. The difference is that verbal agreement usually isn't as detailed as written agreements. But having a written agreement for everything is time consuming and can be a waste of resources when it comes to petty agreements. So companies must know when and how to utilize both type of agreements wisely. For example, if a company is selling a product, through a sales representative, it is usually better to use a verbal contract. It is more convincing, time efficient, and a better marketing strategy. When we call agents to help us book events or hotels, all the calls are recorded and there is usually a verbal contract that we make: the agent reserves a spot and we give our credit card information to prove our liability. For these cases, written agreements would be way too time consuming as it would require the sending in of emails or mails with the contract, it being signed, and then returned. In other cases where the contract is large, and would require heavy legal actions if the agreement is failed is keep, like the partnering of two companies, then the company would want to have a written contract with as much detail written down as possible to defend itself when things go wrong. So I think both types of agreements are beneficial if used wisely.
I would stretch the limits of oral agreements to include texts, emails, and meeting minutes as binding. While written agreements are more of a formality when it comes to contracts, smaller agreements happen more often and don't require the necessities of written contracts. They also allow you to demand work from other engineers in your workplace by having by having email proof of their words. However, having agreements in writing is the best way to uphold the agreement. This type of agreement is usually used in the business setting and it allows you to defend the agreement in court and legal settings. Both sides are responsible to uphold their side of the bargain and the best way to do that is to have the contract in writing.
Hi all,
In the video lecture Dr.Simon mentioned about two terms of contract,Written & Verbal agreement. He said that verbal contract can be legal but what if the due to dispute or other reason the verbal agreement turns to failure. Is there any significant difference between Verbal Agreement & Oral Agreement? How much one should rely on verbal agreement? Is it good to start working on a project just based on verbal Agreement? What are the importance of Written agreement?
If anyone of you had an experience regarding to those questions please share.
It is always better to have things in writing, because it is definitive proof and evidence of an agreement. If something was agreed upon verbally, one of the parties could easily claim they never said what the other parties claims they said, and at that point, it's your word vs theirs. If you have it in writing, however, there's no denying what was agreed upon. While it's unethical to verbally agree to something and then flip flop and back out of the agreement later on, there's nothing legally binding a verbal agreement. Work on a project can start with a verbal agreement, but both parties should have an understanding that things could change and either side could back out of the agreement for one reason or another.
A written agreement is the one done on paper and signed by the people agreeing on the contract/ terms within the document. A verbal agreement is when both parties agree to certain terms verbally and that's it.
The advantage of a verbal agreement is that it is fast and it does cut down the legal cost, on the other hand, it is easier to forget verbal agreements and in case of any dispute among the agreed parties, there is no proof that the agreement was made so it's difficult to prove in court.
While written documents do take time, they are better as nobody can deny the agreement as there is a written proof of the same, also it is easier to prove in court.
The main difference between oral and written agreement is that it is harder to prove the existence of an oral contract. Since it is not written down, the existence of the terms must be proved by the memory of the parties or by other evidence. Whereas the written agreement lies down on a paper and signed by the people legally and agreeing to the terms and conditions. A writing provides certainty, clarity and definiteness to the agreement. Hence there is no susceptible to error and mischiefs leading to disagreements.
A written contract obviously has an advantage over a verbal contract. The terms Verbal and Oral contract can be used interchangeably and mean the same. A verbal contract is a contract that in which the terms of terms and the conditions of the contract are agreed upon spoken communication rather than having a written copy of reference to be able to go back and review at a later time in the future. It is difficult to prove the existence of an oral contract as opposed to a written one in case there is a dispute. For an oral contract to go into action it is necessary that both parties are like-minded and have honest intentions.
I think it is important to have a written agreement as it can be physically presented in a court and it is more reliable compared to an oral agreement. Oral agreements can be presented in the future for any reference or in case of disputes the oral agreements can not be backed up unless there are recordings. but even those can be forged so I believe it is best to have a written agreement.
In my opinion, the difference between oral contract and written contract is the division of contract from the perspective of contract form. Oral contract dispute refers to all disputes arising from the performance of oral contract by the parties to the contract. Although oral contract is simple and easy, but there is no written evidence, so once a dispute occurs, it is not easy to be resolved. A written contract dispute refers to all disputes arising from the performance of a written contract by the parties to the contract. I think if it's an oral contract, it's better to have a recording as a guarantee. The written contract will be more powerful when there is a legal dispute, so if I go to talk about business, I prefer the written contract.
From a practical standpoint, having a written agreement is a way of “vetting” the opposing side. Writing a formal agreement involves the review and assistance of legal counsel during the contract formation process. The act of preparing and negotiating a written contract forces parties to consider and plan for contingencies that may occur during the course of the project. A written agreement spells out exactly what both sides are bargaining for, and what each side promises to do, thereby alleviating to a significant extent the confusion and uncertainty inherent in oral contracts.
In most situations, a written agreement is enforceable in court for a longer period of time than an oral agreement. Depending on the state, failing to obtain a written agreement means the contractor may have less time to enforce its rights under the agreement. In some states, a written contract can be enforced for up to six years, while an oral agreement is only enforceable and legally binding for up to three years.
If a dispute arises regarding the performance of either party during the contract’s lifespan, having a written contract provides several substantial benefits, including the “integration clause.” On the jobsite, the contractor may have entered numerous oral agreements without even realizing it, such as accepting a change in the project deadline or scope of the project. These oral agreements and contract modifications are difficult to prove in a legal contract dispute, which is why it is best to utilize a written agreement for projects that will include numerous and major decisions during the project.
A clear written agreement can provide another significant advantage: a basis for summary judgment. Summary judgment is essentially winning without the need for trial. Basically, this means there are no factual disputes about what the contract says and what each party did. When there is only an oral agreement, it is very difficult to show that there is no dispute in the terms of the agreement, which will most likely present an issue of fact and require a trial in front of a judge or jury.
Ultimately, an oral agreement can become a game of “he said, she said,” making it difficult to prove if there ever was an agreement.
In my opinion it is always better to have a written agreement over a verbal agreement. When you have a written agreement it can be used as evidence in court if anything goes wrong whereas thats not the case in a verbal agreement as the person can deny there was no agreement made and proving that in court would be difficult. Sometimes if you have good work relationship with someone over many years and trust him a verbal agreement would be okay.
