Also known as: parol contracts · oral contract · verbal contract
Written by attorneys · grounded in primary & secondary sources — see below
An agreement formed by spoken words or conduct rather than a complete signed writing. At common law the term also denotes any contract not executed under seal even if reduced to writing.
Pamela Phillips orally agreed to sell land to Piper Patel. Pamela later mailed a signed letter describing the price and closing date but omitting Piper's name. The name and address on the envelope arrived with the letter. The two documents together satisfy the statute of frauds requirement for a memorandum.
Pilar Pena orally promised to manage Premier Manufacturing's warehouse for two years. After Pilar completed ten months of work the company repudiated the deal. A signed letter the company sent two weeks later reciting the two-year term and monthly fee constitutes a sufficient memorandum even though written after breach.
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Patricia Patel orally promised to give her home to Pablo Perez if he moved in and cared for her for life. Pablo sold his business and performed the services for five months until Patricia died. Because no signed writing exists the oral promise remains unenforceable under the statute of frauds.
Pearl Porter orally agreed to sell a vacant lot to Piper Patel for cash. Relying on the promise Piper sold her own home and deposited the proceeds. When Pearl refused to convey the lot the court held that detrimental reliance removed the oral contract from the statute of frauds bar.
Pamela Phillips and Pablo Perez lived together for years under an oral understanding that they would share earnings and property. After separation Pamela sought enforcement of the agreement. The court examined whether the parol contract could be proved by conduct and writings outside the statute of frauds.
Pioneer Energy entered oral royalty agreements with thousands of owners. When royalty calculations became disputed the owners filed a class action. The court addressed whether the parol contracts could be enforced uniformly across the class without individualized writings.
A parol contract satisfies the statute when a signed writing made before or after formation serves as a sufficient memorandum of its terms. Multiple documents may be read together if the signed writing refers to the unsigned one or the parties enclose them in the same envelope.
Once one party has completely performed its obligations within a year the statute of frauds no longer bars enforcement of the other party's promise to pay even though the original agreement could not have been performed within one year.
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Restitution is available for services rendered or expenses incurred in reliance on a parol contract that the statute of frauds renders unenforceable provided recovery is limited to the reasonable value of the benefit conferred and does not frustrate the statute's purpose.
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After the seller conveys land by deed the buyer's promise to pay the price ceases to be within the statute of frauds unless the price itself consists of an interest in land.
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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.…