Also known as: verbal contracts · oral contract · oral contracts
Written by attorneys · grounded in primary & secondary sources — see below
A contract formed by spoken words or conduct rather than by a signed writing. Such an agreement creates mutual obligations but remains subject to the statute of frauds when it falls within an enumerated category requiring a memorandum signed by the party to be charged.
Viktor Voronin and Valentina Vasquez reach an oral agreement for the sale of equipment. Viktor mails a signed letter describing the terms but omitting Valentina's name. The envelope bearing her address arrives with the letter. The documents together satisfy the statute of frauds and bind Viktor.
Vito Villarreal and Violet Vang orally agree that Violet will supply parts for six years. After Violet repudiates two years later, Vito prepares and signs a detailed memo reciting the original terms. The memo satisfies the statute of frauds even though it was created after breach.
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Vera Vu orally promises to leave her house to Veronica Villanueva if Veronica moves in and cares for her for life. Veronica sells her business and provides care until Vera dies. No signed memorandum exists, so the verbal contract remains unenforceable under the statute of frauds.
Vanguard Bank orally agrees to sell a vacant lot to Velocity Logistics. Velocity sells its current headquarters and deposits the proceeds in reliance on the oral promise. The substantial, foreseeable changes in position allow equity to enforce the verbal contract despite the missing writing.
Vega Motors' founder orally promises to share earnings and property with his partner if she supports his career. She forgoes her own opportunities and contributes to the business for years. The verbal contract claim for property division is rejected because Illinois does not recognize such implied agreements between unmarried cohabitants.
Volta Electric royalty owners sue over an oral understanding concerning interest on delayed payments. The verbal contract is asserted in a nationwide class action. The Court holds that the forum state may apply its own choice-of-law rules to determine whether the oral agreement is enforceable.
A verbal contract satisfies the statute when a signed writing by the party to be charged, or writings that may be read together, contain the essential terms. The signature may appear anywhere if adopted with intent to authenticate, and separate documents may be combined if they clearly relate to the same transaction.
Yes. A memorandum sufficient to satisfy the statute may be made or signed at any time, including after breach or repudiation. No requirement exists that the writing be contemporaneous with contract formation.
Equity may enforce an oral land contract when the buyer has reasonably and substantially relied on the agreement and the seller's continuing assent, changing position so significantly that only specific performance avoids injustice. Permanent improvements and business restructuring that are clearly referable to the sale satisfy this standard.
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Restitution remains available for the reasonable value of services or benefits conferred, even though the contract itself cannot be enforced. Recovery prevents unjust enrichment without amounting to enforcement of the oral bargain.
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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.…