Most people assume contracts have to be in writing to count. In fact, under English law, a verbal contract can be just as binding as a written one. What matters is not the form, but whether the agreement ticks the legal boxes that make any contract enforceable.
The basics of a valid contract
For a contract – whether verbal or written—to be valid, four elements must be present:
- offer – a clear promise to do something, such as sell an item or provide a service.
- acceptance – an unambiguous agreement to that offer.
- consideration – something of value exchanged by both parties (money, goods, services).
- intention to create legal relations – both parties must mean for the deal to be legally binding.
If these are satisfied, the law generally recognises the contract, regardless of whether it’s written down.
Examples of enforceable verbal contracts
- Hiring a plumber with an agreed price.
- Buying a second-hand item in cash.
- Agreeing freelance work over the phone.
Courts have upheld such agreements when evidence supported the claim that a deal existed. Cases like Carlill v Carbolic Smoke Ball Co illustrate that contracts don’t have to be written if offer, acceptance, and consideration are proven.
the limits of verbal contracts
Some agreements must, by law, be in writing. Examples include:
- Contracts for the sale of land or property (Law of Property (Miscellaneous Provisions) Act 1989).
- Guarantees – promises to cover another person’s debt must be in writing (Statute of Frauds 1677).
- Certain consumer credit agreements.
So while a handshake deal might work for small transactions, you cannot rely on it for more complex property or finance arrangements.
Proving a verbal contract exists
The biggest difficulty with verbal contracts is evidence. A written document speaks for itself, but a spoken agreement relies on memory and credibility. Courts will look at:
- witness statements from anyone who overheard the deal.
- emails, texts, or messages confirming terms.
- conduct of the parties – for example, invoices sent or payments made.
Where evidence is weak, disputes often become one person’s word against the other. This uncertainty is why lawyers recommend reducing important contracts to writing.
Remedies for breach of a verbal contract
If one party fails to honour a verbal contract, the other can bring a claim for breach of contract. Remedies include:
- damages – financial compensation for losses caused by the breach.
- specific performance – an order forcing the other side to carry out the agreed obligation (rare, usually in property cases).
- rescission – cancelling the contract and restoring parties to their pre-contract position.
Well-established cases such as Entores v Miles Far East Corporation (on communication of acceptance) and Balfour v Balfour (on intention to create legal relations) can be linked here to explain how courts test whether a contract truly exists.
Practical guidance
- Keep written confirmation of any important terms, even if agreed verbally.
- Always follow up phone calls or meetings with an email summary.
- Avoid relying on verbal contracts for high-value transactions.
- Know your rights: if you can prove the deal existed, the law is on your side.
