Are Oral Agreements Enforceable?

Yes…. but

Many small businesses rely on oral contracts. And guess what, in most cases, those contracts will absolutely be enforceable in court. That’s because you only need three things to create a legally binding agreement and a writing isn’t one of the three things.

When a “Writing” is Better

Although most oral contracts are enforceable, you should use written contracts whenever possible.

The issue with oral contracts is that they usually don’t include all the important stuff you should put in your contract and if a dispute arises, it is extremely hard to prove what the terms are. That’s why it’s usually best to put your contract into a physical or digital writing.

You can use physical paper or just create a digital contract using a contract platform like Rally. Create your first contract for free »

When is a “Writing” Required

In a small number of situations, you must put your contract in writing. This is usually for things like debts, marriage, land, etc. Research your state’s Statute of Frauds to learn more.

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Related Guides

There’s so much more to learn! Here are a few related guides you should read:

• The Skinny: What is a Contract?
• Drafting: Five rules to write better contracts
• Templates: Four ways to get a contract template
• Party Names: The right way to identify parties
• MSAs & SOWs: How to use MSAs and SOWs