Believe it or not, verbal agreements are still valid, enforceable, and legally binding contracts that can be relied on to govern legal relationships. Though there may be a few exceptions and key aspects that must be covered for the agreement to be legal, the biggest hindrance in verbal agreements may simply be human memory.

Your word is your bond

Legal agreements of any type need to adhere to the following criteria to be valid in the eyes of the law:

  • All parties to the contract must have legal capacity
  • An offer must be made and accepted
  • There must be legal consideration
  • The contract must be possible
  • The terms of the contract must be legal

It is clear that a verbal agreement can indeed meet these criteria. However, when grievances arise in verbal agreements, some form of evidence needs to be provided proving that an agreement was entered into. Even when evidentiary proof exists in which the agreement is confirmed, without the specific terms being in some way corroborated, the legal battle may still hit a “he-said-she-said” dead end.

Evidentiary proof can be provided through a recording, notes of the conversation, corroborating witnesses, a written confirmation of the agreement (letter, email, text message, etc.), proof of payment, quotes, or transactional statements showing the offer or acceptance.

In terms of South African law, there are legal agreements that need to be in writing to be valid. These include documents such as antenuptial contracts, suretyship agreements, and documentation needed for the sale of immovable property.

Three sides to the story

The greatest difficulty with verbal agreements lies in the old saying, “There are three sides to every story: your side, my side, and the truth.” The fact is that people remember events differently. Memories are shaped and influenced by existing neural pathways, and two minds rarely remember a single event or conversation the same way.

Just think about an argument you have had with a friend or spouse where the entire conflict is born out of differing opinions of who said what. Ironically, both parties are often correct in the way they remember an event or conversation, though neither may remember it exactly as it happened.

Now just imagine having to have that argument over a legal agreement.

So, even though verbal agreements are legally binding and valid for the most part, it is advisable for legal agreements to be put in writing to ensure that both parties are on the same page.

Contact CMM Attorneys to get your legal agreement drafted professionally or for trusted legal representation when your verbal agreement is not being honoured.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)