Oral Contracts: Are They Enforceable?

Verbal agreements, also known as oral contracts, are agreements made between two or more parties without a written document. While verbal agreements can be legally binding, they can also be difficult to enforce. In Texas, the enforceability of verbal agreements is governed by the Statute of Frauds, which requires certain types of contracts to be in writing in order to be enforceable.

What is the Statute of Frauds in Texas?

The Statute of Frauds is a law that originated in England in the 1600s and has been adopted in some form in many jurisdictions, including Texas. The Statute of Frauds requires certain types of contracts to be in writing in order to be enforceable, including contracts that:

• Cannot be performed within one year

• Involve the transfer of an interest in real property

• Involve the sale of goods worth $500 or more

• Involve promises made in consideration of marriage

• Involve promises made in exchange for a person’s promise to pay the debt of another person.

The Statute of Frauds is designed to prevent fraud by requiring contracts to be in writing and signed by the parties involved. This helps ensure that contracts are entered into knowingly and voluntarily and that the terms of the contract are clearly understood.

Enforcing Verbal Agreements in Texas:

While verbal agreements are not required to be in writing to be enforceable, they can be difficult to enforce if the terms of the agreement are disputed. In Texas, verbal agreements can be enforced if they meet certain conditions, including:

• Performance: If one party has fully performed their obligations under the contract, the other party may be estopped from denying the existence of the contract.

• Part performance: The doctrine of partial performance may allow for the enforcement of a verbal agreement in certain circumstances, such as when one party has performed part of their obligations under the contract.

• Evidence: Verbal agreements can be enforced if there is clear and convincing evidence of the agreement, including testimony from witnesses or other forms of documentation.

In conclusion, while verbal agreements can be legally binding in Texas, they can also be difficult to enforce. It’s important to understand the conditions under which verbal agreements can be enforced, including performance, part performance, and evidence. If a verbal agreement falls under the Statute of Frauds, it must be in writing and signed by the parties involved in order to be enforceable. To ensure that your agreement is enforceable, it’s always best to put it in writing.