Is a Verbal Agreement Legally Binding UK

Is a Verbal Agreement Legally Binding UK?

In the United Kingdom, contract law governs the legality and enforceability of agreements, whether written or verbal. While many may assume that contracts must always be documented in writing to be legally binding, verbal agreements also hold significant weight under certain circumstances.

The question of whether a verbal contract is a legally binding agreement in the UK hinges on various factors, including the nature of the agreement, the intentions of the parties involved, and the presence of essential elements required for a valid contract.

Expert Commercial Law offers access to a specialised panel of experienced solicitors proficient in contract law in the UK. For further details and consultation with our legal professionals, please contact us today.

What is classed as a verbal agreement?

Verbal agreements represent contracts established through spoken communication among individuals. Such agreements can occur in various settings, including face-to-face interactions, telephone conversations, or other forms of verbal exchange. In the UK, for a verbal agreement to be legally binding, the law requires that key elements must be present:

  • Offer and acceptance: The verbal contract involves an offer extended by one party and accepted by the other.
  • Consideration: Both parties exchange something of value, whether goods, services, or promises.
  • Intention: There exists a mutual understanding and acknowledgment by both parties regarding the legally binding nature of the agreement.
  • Capacity: Both parties possess the legal capacity to engage in and uphold the terms of the agreement.

Although under these considerations, a verbal agreement is legally binding in the UK, there are some exceptions. Certain contracts require written documentation, such as transactions involving licensed dealers for vehicle purchases or real estate transactions. Nevertheless, in numerous other scenarios, provided the criteria is met, a verbal agreement carries enforceability within the legal system.

How to protect from breach or liability

While not all contracts require written documentation and many are established verbally, a significant drawback of verbal agreements lies in the issue of memory. The ability to recall details becomes crucial in the event of a dispute over a verbal agreement.

Therefore, the presence of any notes, pre existing information, emails, or text messages in correspondence to the agreement can prove highly advantageous in determining liability. Additionally, the testimony of third-party witnesses who were present during the agreement holds significant weight in resolving disputes related to verbal agreements.

The common issue with verbal agreements is the potential for one party to renounce the agreement altogether or claim that the conversation never occurred. Consequently, it is often recommended for contracts to be in writing since written contracts specify the terms in detail and are endorsed by all parties involved.

Resolving verbal agreement disputes

Resolving disputes arising from verbal agreement contracts can be challenging but manageable with careful consideration. Here are steps to help resolve such disputes effectively:

  1. Communication and Clarification: Encourage open communication between the parties involved in the verbal agreement dispute. Attempt to clarify misunderstandings and resolve disagreements through respectful dialogue.
  2. Mediation: Consider engaging in mediation or alternative dispute resolution (ADR) processes. A neutral third-party mediator can facilitate constructive discussions between the parties and help reach a mutually acceptable resolution outside of court.
  3. Negotiation: Explore negotiation as a means to reach a compromise or settlement. Identify key points of contention and work towards finding mutually agreeable terms that address the interests and concerns of all parties involved.
  4. Consider Legal Action: If informal resolution attempts prove unsuccessful, consider pursuing legal action through the court system. File a claim or initiate legal proceedings to seek judicial intervention and resolution of the dispute.
  5. Adjudication: In cases where legal action is pursued, the court will adjudicate the dispute based on relevant laws, contractual principles, and evidence presented by both parties. A solicitor can help to prepare your case and represent you in the courtroom.

By following these steps and engaging in constructive dialogue and legal processes, parties can work towards resolving disputes arising from verbal agreement contracts in a fair and equitable manner.

Why choose Expert Commercial Law?

All of the commercial dispute solicitors on our panel have the experience and expertise required to take on your case. Each solicitor is vetted before being allowed onto our panel, and we only select the best in the business. All of our solicitor firms are authorised and regulated by the Solicitors Regulation Authority (SRA).

Our solicitors also help with other commercial claims, such as breach of contract and CCJ removal.

Please note we are not a firm of solicitors; however, we maintain a panel of trusted and regulated legal experts. If you contact us in relation to a commercial law case, we will pass your case on to a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm.

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Please note, we are not a firm of solicitors; however, we maintain a panel of trusted and regulated legal experts. If you contact us in relation to a commercial law case, we will pass your case onto a panel firm in return for a fee from our panel firms. We will never charge you for passing on your case to a panel firm. 

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