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Is an oral contract legally
enforceable?
Generally speaking
an oral contract is indeed legally enforceable (although for most
complicated contracts such as those in complex commercial transactions,
the contractual parties usually create agreements in writing in order
to avoid any dispute regarding the terms). However, certain types
of contracts, for example those creating rights and obligations in
and over real property, must as a matter of law be in writing to be
legally enforceable. Express Terms
and Implied Terms:
"Express terms" are terms that have been unambiguously
expressed by the two parties in writing (or orally) in the contract.
"Implied terms" are terms that have never been expressly
mentioned by the parties. Terms may be implied by the parties themselves,
by law, or by customs.
The Need for Written Contracts
Contrary to common wisdom, an informal exchange of promises can
still be binding and legally as valid as a written contract. A spoken
contract is often called an "oral contract", not a "verbal
contract." A verbal contract is simply a contract that uses
words. All oral contracts and written contracts are verbal contracts.
Contracts that are created without the use of words are called "non-verbal,
non-oral contracts" or "a contract implied by the acts
of the parties."
Courts in the United States have generally ruled
that if the parties have a meeting of the minds, and act as though
there was a formal, written and signed contract, then a contract
exists. However, most jurisdictions require a signed writing for
certain kinds of contracts (like real estate transactions). A law
setting out such requirements is typically called the Statute of
Frauds; the name originates from an English statute that was for "the prevention of frauds." The point of the Statute of
Frauds is to prevent false allegations of the existence of contracts
that were never made, by requiring formal (i.e. written) evidence
of the contract.
Furthermore, the existence of a written contract
does not necessarily ensure its enforceability or validity. A contract
can be deemed unenforceable if it requires a party to undertake
an illegal act, if it was signed under duress or while intoxicated,
if the disparity in knowledge between the parties is extreme and
the weaker party was given onerous terms, etc.
If you engaged in a Los Angeles implied or oral contract, contact a Los Angeles contract lawyer at our law firm today to set up a consultation. We help explain what parts of the implied or oral contract are enforceable and in what situations that you can make a claim. Our Los Angeles contract attorney gives clients information about what to do if they have questions about their contracts.
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