When Is an Oral Contract a Legally Binding Agreement?

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Of course, there are times when an oral agreement just will not suffice. 

Under certain situations an oral contract itself, even when done properly and has everyone on board, will not be enforced.  As a result, these agreements do require a written contract.  There are a few instances requiring a contract such as promising to pay another person’s debt, pre-nuptial agreements, and agreements lasting for more than one year. Another such example is where a written contract is required deals with buying and selling real estate.

Any agreement involving the buying and selling of real estate must be finalized with a written agreement and normally with prescribing witnesses including a notary’s signature to effectuate the transfer of title.  So, without a written agreement, these particular agreements will not be enforced should the need arise.

So, while one does not generally need a written document to formulate an agreement, written agreements do provide more assurances for the parties involved.  Of course, written agreements should be drafted correctly.  This is where the expertise of an attorney becomes necessary.

Regardless, if you are ever in the unfortunate position of having to use an oral agreement, take heart in knowing they are enforceable so long as you can prove their existence and they do not fall into one of the exceptions to enforceable oral agreements.

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