A Forward-Thinking Firm

When does a verbal promise become legally binding?

| Jul 12, 2021 | Contracts |

A lot of small businesses in the Ormond Beach area pride themselves on the strength of their word. If they say that they can get a job done for a client in a particular period of time, they do it. If they indicate that goods will be secured and delivered, they stick to it. While word-based agreements like these can certainly help you build client relations, it can also cause legal issues. After all, if you’re reading this blog post, then you might be wondering when mere talk becomes a legally binding contract.

Can a verbal promise be considered a legally enforceable contract?

The short answer is “yes.” In some circumstances, verbal promises can be enforced as a contract. Before that will happen, though, the circumstances at hand have to be carefully analyzed. When doing so, there are a number of factors that will be looked at that will support a showing of enforceability. Here are some of them:

  • An actual offer was made
  • That offer was realistic
  • The parties intended for the verbal promise to be adhered to
  • The parties have a history of conducting business with verbal agreements
  • One party relied on the verbal promise to its detriment

This last characteristic, detrimental reliance, is often key. In order to show that a verbal promise was indeed a contractual arrangement, it must be shown that by agreeing to the verbal arrangement you were financially harmed in some way. This may mean losing out on another favorable contract that is now unobtainable, or delaying a project that has resulted in more expense.

Know how to appropriately address your contract issues

Verbal promises are made all the time in the business world, especially when it comes to small businesses that are looking to save money on legal costs. We get that, but we also know that contract disputes can put you and your business at risk. That’s why if you’re confronting one of these issues now, then you may want to discuss it with a competent business law firm like ours.