Are verbal contracts enforceable?

Many small business owners in Georgia enter into verbal contracts from time to time. In the event that the terms of these contracts are breached, it may be necessary to seek legal assistance, especially when money is on the line. However, The Balance explains that although verbal contracts may be legal, they’re not always enforceable in a court of law.

The real issue is the lack of evidence. Verbal contracts can very quickly devolve into a war of words between two parties. That means it may be impossible to show what terms were actually agreed to on either side. If terms can’t be established then it stands to reason that a breach of contract can’t be established either. In fact, some states even mandate that certain types of contracts must be written in order to be legally binding.

This includes contracts occurring for marital purposes, such as a prenuptial agreement. If spouses come to terms on a certain matter but don’t actually develop a written agreement, these terms will probably not matter should they get divorced. Real estate transactions must also be documented properly, as must contracts with a duration longer than one year. A person also can’t make financial decisions on another’s behalf unless a contract is in place.

While small matters may not seem worthy of drafting contract, most attorneys recommend that you do so anyway. A simple contract can save a lot of money and time should the matter go to court. Instead of trying to prove what the other party agreed to, you can provide a written document which states in clear language the terms and what each party is obligated to do. 

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