An oral contract is an agreement made through spoken communication between parties involved based on stipulated terms. Oral contract can only be legally binding if the appropriate elements of the contract are present. Although oral contracts are legally binding, there are a number of exceptions based on how the contract was established and the reason for the contract. The terms of a valid oral contract include capacity, offer and acceptance, free consent of the parties, lawful purpose, certainty and completeness of terms, and lawful consideration. It is important for parties involved to ensure the terms of a valid oral contract are in place for it to be binding. In offer and acceptance, one party provides a proposal and the other party agrees to the terms. The contract purpose must be lawful for it to be valid. Additionally, the item exchanged in the contract (consideration) must be legal. The terms of the contract must be clear, complete and well represented. The parties involved should consent freely to the terms of the agreement without persuasion, misrepresentation, duress or influence. The parties entering the agreement are required to have a sound mind and be the age of the majority and above. The oral contract is not binding if it misses any one of the elements mentioned above ( Saxena, Kumar & Pandey, 2018). Therefore, before entering an oral contract, it is important for the parties to determine that the critical elements of the contract have been met, which makes it easy to prove the existence of the agreement.
Even with the existing common belief, oral contract is enforceable in the United States depending on the rules and regulations of the specific states. Just like the written contract, an oral agreement is enforceable. Although oral contract may be legally enforceable, proving it in court can be a hustle. However, as long as the involved parties have enough evidence, the oral contract can be enforced by a court of law. The enforceability of the contract is based on the satisfaction of the fundamental elements of a contract, which is substantive proof of its existence. Considering all the elements while entering the oral contract is adequate in enforcing the contract terms. It is important for parties involved in the oral contract to take the step of documenting the existence of the agreement in case one of the party fails to uphold to the stipulated obligations. Breaching an oral contract occurs when one party fails to uphold the obligations of the contract, with lack of a legal excuse. In the event that this happens, the parties involved have the right to dismiss the contract or sue the defaulted party in a court of law for inconveniences caused in the contract ( Pierce, 2018).
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Implied contracts is an obligation that is legally binding, which emanates from the circumstances, conduct, or actions of the parties involved. It is believed to exist thus does not require any oral or written confirmation. Implied law are also referred to as “quasi contract” whereby the law bestows responsibility upon the parties involved in the contract. If the parties act in a manner suggesting that they have agreed to the obligations created, then the court will identify the parties to have taken part in the contract. An example of an implied contract involves a party accepting a reward from another party in cases where the reward cannot be identified as a gift. Hence, the party agrees to the benefit under a lawful duty to offer reasonable benefit provided. Implied contracts stipulates that it is the responsibility of an individual to adhere to the terms of the contract without fail. However, in the event that one party feels unjust cases occurring through the actions of the other party, then they are entitled to be paid (Wolf et al., 2019).
References
Pierce, B. (2018). Contract Law Govern the Recruitment Process and Enable Enforcement of Verbal Commitments. JL Bus. & Ethics , 24 , 127.
Saxena, N., Kumar, D., & Pandey, A. K. (2018). U.S. Patent Application No. 10/062,130 .
Wolf, B. M., Curran, J. F., Farrell, J. W., Callaway, P. J., Galster, B. L., Milne, A., ... & Wilcox, J. (2019). U.S. Patent No. 10,204,377 . Washington, DC: U.S. Patent and Trademark Office.
