A Guide to Verbal Agreements in Florida: Legal Analysis and Recommendations

What Are Verbal Agreements?

As a general rule, parties are required to have a written contract before they can bind themselves legally. However, even oral or verbal agreements can be considered legally binding in some cases. Verbal agreements are unique in that they involve only spoken words and do not involve any written documentation. Unfortunately, some people have a hard time believing this to be the truth and tend to misinterpret the meaning of verbal agreements. Verbal contracts in the eyes of the law are essentially viewed as an agreement made orally without any written note including the terms intended by both parties.
The concept of a verbal agreement is slightly different than the concept of an oral contract although they are interchangeable in some ways . Oral contracts are actually a form of verbal agreements as they involve the spoken words of both parties that do not necessarily appear in any written format. These terms are relevant when referring to the concept of a verbal agreement. The statute of frauds usually requires contracts for goods over $500 to be in writing. These agreements are sometimes called simple contracts, because they usually involve simple transactions in which no monetary value is placed on the promise. Typically, these are informal agreements between members of the same family or two friends.
Certain verbal contracts might not always be considered legally binding. Some of these contracts might include verbal agreements that involve the sale of real estate, a promise to guarantee payment to a third party, or an agreement that takes more than one year to complete.

Legality of Verbal Contracts in Florida

In general, oral or verbal contracts are legally binding in Florida. However, some circumstances make it difficult to prove the existence of a verbal agreement. You would need text messages, emails, or other written communications to verify that an oral contract was formed.
Florida Statute Section 725.01 provides that the following types of contracts must be in writing:
Florida courts have repeatedly enforced verbal agreements under the doctrine of promissory estoppel, which is a legal theory used to enforce verbal contracts that would otherwise be unenforceable. A court will find that a verbal contract is binding when the following criteria are met:
Caldwell v. Rains, 12 So. 2d 100, 101 (Fla. 1943). In Caldwell, the plaintiff alleged that an oral contract existed for the sale of land. However, the defendant denied that an oral contract existed and sought to dismiss the case because the contract was not in writing. The lower court found that a verbal contract existed for the sale of land and the defendant appealed.
The Florida Supreme Court held that the defendant was estopped from relying on the statute of frauds as a defense against the enforcement of a binding verbal contract. The court noted that it would be unjust for the defendant to rely on a technicality in order to avoid performing under the contract. The court stated, "The rules of equity will not permit a person who has induced another to act, either to his own undoing or to his detriment, to take advantage of the statute [of frauds]." Id. at 103.
Florida law requires that all real estate contracts be in writing under the Statue of Frauds. An exception exists if a party partially performs, thereby removing any need for the contract to be in writing. Repeated payments alone are not enough to remove the statute of frauds from real estate contracts, but part performance of a contract can operate to take it out of the statute of frauds. Part performance may include (1) possession, (2) occupancy, (3) improvement, (4) alteration, or (5) extensive repair of the land. Caldwell, 12 So. 2d at 101.

Enforceability and Limitations

The enforceability of verbal contracts in Florida can be influenced by various factors and circumstances. While Florida does allow for verbal contracts, these agreements are not always binding or enforceable. The statute of frauds enumerates contracts that must be in writing to be enforceable. For example, the sale of real estate must be in writing under Florida law.
There are also certain limitations on verbal contracts. For example, if a verbal agreement is entered into with certain groups of vulnerable individuals, such as minors, it is possible that the agreement may not be enforceable.
Further, an oral agreement may not be admissible in court if an opposing party denies the making or the terms of the oral agreement in writing. In addition, oral contracts may become complicated because of the difficulty of proving the existence of an agreement without a written contract. This problem can often be avoided by obtaining a signature.
Another potential pitfall of oral agreements is the future change of circumstances. For instance, if a person agrees to do work for someone else in exchange for some form of payment, but the person backing out of the oral agreement denies having the conversation, the person doing the work may not have any record of the conversation to present in court to substantiate his or her claim for payment.
In general, whether a verbal contract is enforceable will depend on the specific circumstances of the case. If you have an agreement that was entered into verbally and you would like to enforce the agreement, an attorney can help you protect your rights in the agreement.

Pros and Cons of Verbal Agreements

The benefits of entering into a verbal contract include the ease in which you can form them. They are also flexible and informal, as they are not governed by a particular set of rules or provisions. Parties of different backgrounds, ages and sophistication can easily enter into a bargain. This can also help parties who want to avoid spending time and money on unnecessary litigation. If the parties are honest, responsible, and have a good relationship, verbal agreements are usually beneficial.
However, verbal agreements can result in disputes and result in significant delays and litigation costs. Verbal agreements require the parties to agree on all of the terms, which can be time-consuming. Also, as discussed above, oral contracts are not governed by a formal set of rules, so they can be difficult to interpret. Finally, oral evidence of a verbal agreement can be inadmissible in court.

Establishing a Verbal Agreement in Court

Proving the existence of a verbal agreement in court may prove to be a daunting task, but with the right documentation and witnesses, it may be possible. Clear evidence is necessary to show that an oral contract or verbal agreement existed:
Witnesses — Independent witnesses will go a long way in establishing the existence of the oral contract. Additionally, the more witnesses who can confirm the agreement, the stronger the case. Witnesses who attended meetings and who can provide other circumstantial evidence of the agreement are also important.
Document Everything — When a verbal contract is made, it can often be difficult to gather material to back up the existence of the contract. If you can, it is always best to write down exactly what the verbal agreement consists of, including the terms, payment and any other relevant information.
Follow Up in Writing — If you have any follow up agreements, including changes to the contract, these should also be put into writing and signed by all parties.
Use the Following to Help Prove Your Case:
Witnesses . Sometimes witnesses are employees who can provide additional testimony with regard to company hiring practices, and whether those practices were followed in this case. Additionally, an employee can testify regarding the actions of his or her supervisor. Additionally, other witnesses include business principals, accountants, and certified public accountants.
Physical Evidence. Any documents or paper trails that match events associated with the oral contract will help to prove its existence. Such documents may include emails, financial statements, invoices, letters, phone call records, bank deposits, emails, and other records that have been prepared as part of the agreement process, such as drafts of written contracts or drafts of related documents.
Documentation. Any emails or other correspondence regarding the subject of the verbal Agreement. If any documents have been presented regarding the Agreement, such as drafts of the Agreement, notes from meetings, memos, emails, etc., these can help prove that the parties entered into the agreement. If there were disagreements, email trails showing this as well as notes at the time can help establish the terms of that disagreement when the parties tried to resolve it.

Safeguarding Your Interests with Verbal Agreements

Verbal agreements, while not recommended, are sometimes unavoidable. Even in situations where the parties intend to create an enforceable contract, they may be unable to do so because of issues such as time constraints, the need for immediate assistance, and insufficient communication. Understanding how to protect your interests in a verbal agreement that you have already entered into is essential, and there are some key strategies that can be applied. The first strategy is to send a letter summarizing the terms of your conversation to the other party. This letter should be sent as soon as possible after your oral agreement to avoid a situation where one party forgets important terms or where the other party may try to claim that the terms you both discussed were not mutually agreed upon. While oral agreements often contain vague terms, it is advisable to summarize specific details such as who the parties are, what their obligations are, any particular promises that were made of either party, and how payments and timeframes for performance are handled. Even if the terms discussed are imperfect, attempt to include all important details. The next strategy is to attempt to get the other party to acknowledge the letter in writing. For example, the other party could respond to the letter by stating that it is correct and that the other party does indeed agree with the terms stated. Although an oral agreement is still not recommended even if this step could be accomplished, it allows for future use of the letter as evidence of the terms agreed upon between the parties should a dispute arise over whether the agreement was made. If the agreement contains any major terms likely to be disputed, such as the description of services or the amount of compensation provided for those services, it is essential to get the other party to acknowledge their acceptance of the terms in writing for enforcement. Even though a verbal agreement is less reliable than a written agreement, especially in Florida, protecting your interests in an oral contract is still important.

When to Consult an Attorney

When it comes to verbal agreements in Florida, it is critical to seek legal advice under certain circumstances. Situations where the complexity of the agreement or the nature of the dispute requires professional mediation often call for the expertise of a skilled legal professional. If you find yourself in any of the following situations, seeking counsel is essential:

• Formalization of Agreement: If you wish to transition from an informal verbal agreement to a legally binding written contract.
• Breach of Contract Litigation: If you suspect that the other party has broken the terms of your agreement, leading to a dispute that could result in litigation .
• Complex Agreements: If the verbal contract involves a complex arrangement of goods or services that require specific attention to legal terminology and interpretation.
• Disputes Over Terms: If the agreement’s terms are being challenged or interpreted in opposing ways by the two parties.

Consulting with a lawyer will help you assess your situation and determine whether a verbal agreement is legally binding in your case. However, in most other instances, a legal consultation is not warranted. Avoiding the bureaucracy of engaging lawyers may suit some, especially in the event of an amicable agreement, but if efforts fail, then consulting with an experienced attorney may be your best option.