An oral agreement, also known as a verbal agreement or handshake agreement, is a legal agreement that is made purely through spoken words. It is not written down or formally documented, but it is still legally binding.
Oral agreements can be made between individuals, businesses, or even governments. They are often used in situations where it is not practical or necessary to create a formal written contract, such as in small business transactions, personal agreements, and simple service agreements.
However, it is important to note that while oral agreements are legally enforceable, they can be difficult to prove in court. This is because there is no physical evidence of the agreement, and it can often turn into a “he said, she said” situation.
To protect yourself when making an oral agreement, it is important to have clear communication with the other party and to document the agreement as much as possible. This can include sending follow-up emails or text messages summarizing the terms of the agreement, or having a witness present during the agreement.
In some cases, it may be necessary to have a written agreement in order to ensure that both parties are clear on the terms of the agreement. This is especially true for more complex agreements, such as those related to employment, real estate, or intellectual property.
Overall, while oral agreements can be a convenient way to make a deal, it is important to approach them with caution and to take steps to protect yourself and your interests. By being clear and communicative with the other party, and by documenting the agreement as much as possible, you can minimize the risk of any misunderstandings or disputes down the line.