Also known as: oral contracts · verbal contract · parol contract
Written by attorneys · grounded in primary & secondary sources — see below
A contract formed by spoken words or conduct rather than by a signed writing. The agreement is subject to the statute of frauds when it falls within one of the enumerated categories, but a sufficient memorandum or an applicable exception may render it enforceable.
Onyx O'Reilly and Opal Okoro reached an oral agreement for the sale of commercial equipment. Onyx later mailed Opal a signed letter describing the price and delivery date but omitting her full name and address. The envelope bore Opal's complete name and address. A court read the letter and envelope together as a sufficient memorandum satisfying the statute of frauds.
Orson Ochoa orally promised Omar Olson a two-year consulting engagement. After Orson repudiated the deal, Omar located and signed a detailed internal memo he had prepared before the oral agreement that accurately recited the terms. The court treated the later-signed memo as a sufficient writing that satisfied the statute of frauds.
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Odin Obeng orally agreed to sell his house to Oscar Ortiz for a stated price. Oscar immediately sold his own home and incurred moving expenses in reliance on the promise. When Odin refused to convey, a court enforced the oral contract under the part-performance exception because Oscar's actions were unequivocally referable to the agreement.
Olympus Banking's employee orally promised lifetime use of a cottage to a housekeeper in exchange for unpaid services. The housekeeper performed years of household work but never took exclusive possession or made improvements tied solely to ownership. The court held the services were not unequivocally referable to an oral land contract and refused enforcement.
Omar Olson and Opal Okoro lived together for fifteen years under an oral agreement to share earnings and property as if married. After separation, one party sought enforcement of the earnings-sharing promise. The court dismissed the claim because Illinois public policy required such financial arrangements to rest on a valid marriage.
Orion Technologies orally contracted with a stevedore company to load cargo onto its vessel. The company performed the work but later disputed payment terms. The court applied general maritime law to determine whether the oral agreement created enforceable obligations despite the absence of a writing.
An oral contract is subject to the statute when it cannot be performed within one year, involves the sale of land, or constitutes a suretyship promise, among other enumerated categories. The statute's primary purpose is evidentiary, aimed at preventing perjured testimony about disputed oral terms.
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Yes. A memorandum is effective if made or signed at any time before or after contract formation, including after repudiation. The writing need only contain the essential terms and be signed by the party to be charged.
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The acts must be unequivocally referable to the alleged agreement and unintelligible without it. Mere services or payments that could be explained by some other relationship do not satisfy the doctrine.
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Yes. Once one party has fully performed, the one-year statute no longer bars enforcement of the remaining promises of the other party.
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…has been sought. Texas courts have, however, specifically permitted recovery at higher rates when a contract, even an implied or oral contract, evidences agreement to such rates. Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enterprises , 625 S. W. 2d 295 (Tex. 1981); Moody v. Main Bank of Houston , 667 S. W. 2d 613 (Tex. App.…