What Is a Oral Agreement

An oral agreement, also known as a verbal agreement, is a contract made between two or more parties verbally, without any written documentation. While oral agreements are legally binding, they can be difficult to enforce in court, especially when there is no proof or evidence to support the agreement.

An oral agreement can cover a wide range of subjects, including business deals, employment contracts, tenancy agreements, and personal contracts. For instance, if someone agrees to sell their car to another person verbally and both parties agree to the terms, then this constitutes an oral agreement.

However, in most cases, it is always advisable to document agreements in writing. This is because written agreements provide a clear and detailed record of the terms of the agreement, which can be referred to in case of any disputes in the future.

One of the main benefits of written agreements is that they provide a written record of the terms, which can be used to enforce the agreement in court. In contrast, oral agreements are usually based on the word of mouth, which can be difficult to prove in court.

Another benefit of written agreements is that they can include important legal terms and conditions, including clauses that limit liability, indemnification language, and termination provisions. This protects all parties involved in the agreement should any unforeseen circumstances arise.

When entering into an oral agreement, it is important to be clear about the terms of the agreement, as misunderstandings can easily occur. It is also advisable to follow up the agreement with an email or written confirmation, which can serve as proof of the agreement in case of a dispute.

In conclusion, oral agreements can be legally binding, but it is always advisable to document agreements in writing to avoid any misunderstandings or disputes in the future.

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