Any experienced contract law attorney will likely advise you to put all agreements in writing. This helps eliminate any ambiguity over the contract terms and is good business practice. But is this a legal requirement, or are oral agreements equally binding? Below, we examine the legalities of oral agreements and the law in Las Vegas, NV.
Although oral agreements are less common, they are legally binding and carry the same weight as written contracts. As long as the criteria for forming a contract are met, an oral agreement is just as enforceable as a written one. However, verbal contracts are used less frequently because misunderstandings are more likely to arise.
What Constitutes an Oral Agreement?
An oral agreement must include the same fundamental elements as any other type of binding contract:
- Offer and acceptance
- Mutuality
- Consideration
- Legality
This means that a clear offer must be made and accepted and both parties must fully understand the terms. There must be benefits going in both directions, such as services and payment: otherwise it is a gift, not a contract. It is only possible for a contract to be binding if the subject is lawful; agreements involving criminal or illegal activities cannot be enforced.
Are Oral Agreements Always Valid?
The statutory code in Nevada prohibits oral agreements in the following situations:
- For the sale of goods with a value of $500 or more
- Any real estate contracts
- Assignment or grant of an existing trust
- All marriage contracts and settlements (including divorce)
- Fees of $1,000 or more for securing a loan for another person
- Money lending with a value of $100,000 or more
- Pre-marital agreements
- Agreements that aren’t due to be enforced for at least 12 months
- Agreeing to be responsible for the debt of another person
If you attempt to make an oral agreement for any of the above, the contract will not be legally binding.
Can Oral Agreements Be Useful?
Having a written agreement is generally preferable. There can be disagreements or misunderstandings in even well-established professional relationships, and written contract terms are a valuable point of reference. However, oral agreements may still be practical in some circumstances, such as:
- Personal or small transactions
- Temporary or short-term agreements
- Agreements within a trusted relationship
For example, an oral agreement may be sufficient when taking a vehicle to a trusted mechanic for a minor repair.
Get Advice From a Contract Law Attorney
If you have entered into an oral agreement or are considering making one, it’s advisable to consult a legal professional. An attorney with experience in contract law can guide you through the process and help ensure that the agreement meets your needs. They can also assist with disputes or breaches of oral contracts, including enforcement action.
With our extensive experience in business contracts, we have successfully helped numerous clients. To discuss your business contract needs, get in touch with us today at Hutchings Law Group in Las Vegas, NV.
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