Concepts of Oral Contracts in the United States

Introduction 

An oral contract refers to a certain agreement whose terms have been agreed by spoken communication. This is in contrast to written contracts, in which the terms are in form of a written document. An oral contract may be considered valid and subsequently enforced just like the traditional written contract. However, it is important to realize that oral contracts are much more difficult to ascertain whether they exist, or not. Besides, oral agreements normally have a limited time within which it can be enforced. As such a written contract generally easier to enforce compared to an oral contract. The stipulations exchanged in a typical contract are generally important than the ways through which they were exchanged ( Wilkinson-Ryan, 2014 ). Thus, just like written contracts, oral contracts need to be upheld so long as there is an agreement between parties. 

Making a Valid Oral Contract 

Essentially, written or physical evidence relating to the terms of the oral contract ought to be used to prove their existence. The evidences often serve to strengthen the argument relating to the existing terms of an oral contract, as well as ensure the performance of the particular terms relating to the oral contract. Normally, the evidence should always be signed by both parties in order to be considered valid (Means, 2014). Basically, evidences regarding an oral contract can be affirmed through writing. In the United States, an oral contract has been used for multiple landmark agreements. 

The enforceability of oral contracts can be achieved by incorporating various elements which include mutual consent, offer and acceptance, mutual consideration, performance and good faith. Mutual consent relates to the fact that the parties to a given oral contract should be cognizant about what they are agreeing to. Thus, mutual consent is a very significant element of any oral contract. For instance, if an individual hires a contractor to build a house, both parties should understand exactly the type and the size of the house to be constructed. Lack of an agreement regarding the nature and amount of the work to be done could render the oral contract invalid. Offer and acceptance is another important aspect of an oral contract. With regards to offer and acceptance, one of the parties to a contract has to propose something that the other party can accept under given terms. For instance, the individual who wants his house built should offer something in return for the services for which the contractor will be willing to accept. Therefore, there should be an offer an acceptance in a given oral contract if at all it should be enforced. 

There should also be a mutual consideration in an oral contract. Having a mutual consideration means that the parties enjoined in a contract must exchange valuable goods, rights or services. A mutual consideration is essential for an oral contract to be considered valid. Performance is another important element needed in an oral contract. Thus, the contractual parties have some special duties to perform relating to the contract, in addition to the mutual consideration. Failure to perform the duties as required in the contract may the render it invalid. Lastly, good faith is also an important element in a typical oral contract. As such, the parties to an oral contract should not seek to enter into an oral agreement whose objective is to break the law or cheat each other. It is worth realizing that particular jurisdictions may require some specific contracts to be put in writing. 

Statute of Frauds 

Although oral contracts are recognized, and can be subsequently in the United States, there are, however, instances in which they are not acceptable. The statute of frauds is a law in every state, which requires that certain documents must be in writing (Wilkinson-Ryan, 2014). It exists to prevent deceitful conduct in high value or long term situations. Mostly, the statute of frauds requires a written contract in situations involving real estate sales, property transfers after owner’s death, contracts that take more than a year to accomplish, agreements to pay others’ debt, and contracts that last longer than the life of one of the parties (Rayton & Yalabik, 2014). This shows that, in some instances, courts may not enforce oral contracts. However, there are situations in which oral contracts falling in the aforementioned categories can be enforced. For instance, if one party complied partially with the terms of the oral contract, it can be enforced. Additionally, an oral contract can be enforced in cases where the plaintiff relied significantly on the promise made by the defendant, ultimately suffering a major problem. It is important to realize that the burden of providing evidence for oral contracts fall on the plaintiff. As such, a plaintiff is much more likely to receive a favorable judgment from the court if he is able to provide some kind of circumstantial evidence of the existence of an oral contract. 

Implied Contracts 

An implied contract refers to an agreement resulting from the actions of the actions of the parties, but is not spoken or written. Essentially, an obligation is normally created by the law in the interest of fairness, considering the conduct or circumstances of the parties. Generally, there are two forms of implied contracts: implied in-fact and implied at-law contracts. 

An implied in-fact contract relies on the facts of the situation to create an obligation. Thus, if the conduct or the circumstances of the parties indicate they had an agreement or understanding that resulted in a particular obligation, the law will find that they had an implied in-fact contract (Means, 2014). Normally, the courts will determine whether a contract exists by looking at the course of conduct between the parties. For instance, if one is hired by his neighbor to mow the lawn every Tuesday for the whole summer. He then proceeds to mow the lawn for three weeks and get paid each Wednesday. If the person mows the lawn on the fourth Tuesday and his neighbor fails to pay him the next day on Wednesday, the mowed lawn will infer that there is a contract between him and his neighbor. 

With regards to implied at-law contract, the law relies upon the circumstances that may lead to one of the parties being enriched unfairly by another party’s actions if a remedy is not sought, to impose a duty to perform a contract. The court will impose such a contract even if it is against a party’s will. In such a situation, one of the parties is entitled to compensation for the services provided, although there was never any intent by either party to enter into an agreement. 

References

Wilkinson-Ryan, T. (2014). Intuitive formalism in contract. U. Pa. L. Rev. , 163 , 2109. 

Means, B. (2014). The Contractual Foundation of Family-Business Law. Ohio St. LJ , 75 , 675. 

Rayton, B. A., & Yalabik, Z. Y. (2014). Work engagement, psychological contract breach and job satisfaction. The International Journal of Human Resource Management , 25 (17), 2382-2400.