By Verbal Agreement

By Verbal Agreement: What It Means and Why It Matters

When two parties come to an agreement on something, it is important to have a clear understanding of the terms and conditions involved. In some cases, this agreement may be formalized in writing. However, in other cases, the agreement may be made by verbal agreement.

What is a verbal agreement?

A verbal agreement is an agreement that is made through spoken communication. It is a non-written agreement that is made between two parties, without any formal documentation. Verbal agreements are often informal, and they may be made in person, over the phone, or through other means of communication.

What are the pros and cons of a verbal agreement?

There are a number of pros and cons associated with verbal agreements. On the one hand, verbal agreements can be quick and easy to make, especially in situations where time is of the essence. They can also be less expensive than formal, written contracts, which may require legal assistance.

However, there are also some disadvantages to verbal agreements. One of the biggest challenges is that they can be difficult to enforce. Without any formal documentation, it may be difficult for either party to prove what was agreed upon, or to enforce the terms of the agreement in the event of a dispute. Additionally, verbal agreements may not be legally binding in some cases, which means that they may not hold up in court.

Why is it important to have written contracts?

For these reasons, it is generally recommended that agreements be made in writing, and that formal contracts be put in place whenever possible. Written contracts can help to ensure that both parties have a clear understanding of the terms and conditions involved, and they can help to prevent misunderstandings and disputes down the line.

In addition, written contracts can provide a legal framework for the agreement, making it easier to enforce the terms of the agreement in the event of a dispute. They can also provide a record of the agreement, which can be useful for reference in the future.

Conclusion

In conclusion, while verbal agreements can be an easy way to come to an understanding between two parties, they can also be risky. Without formal documentation, it may be difficult to enforce the terms of the agreement, which can lead to misunderstandings and disputes down the line. For this reason, it is generally recommended that agreements be made in writing, using formal contracts whenever possible. Doing so can help to ensure that both parties have a clear understanding of the terms and conditions involved, and it can help to prevent disputes and misunderstandings from arising in the future.