The Meaning of Oral Agreement

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An oral agreement, also known as a verbal agreement, is a type of contract that is made verbally between two parties without any written documentation. While a written contract is usually preferred because it provides evidence of the terms agreed upon, oral agreements are also legally binding.

The most common type of oral agreement is a handshake deal, which is a simple agreement made between two people with a handshake to symbolize the deal. Although this type of agreement is not recorded in writing, it is still legally enforceable.

In order for an oral agreement to be legally binding, it must meet certain criteria. First, both parties must agree to the terms of the agreement. Second, there must be an exchange of something of value. This can be in the form of money, goods, or services. Third, the terms of the agreement must be clear and specific.

If one party breaches the oral agreement, the other party may be entitled to sue for damages. However, proving the existence and terms of an oral agreement can be difficult without any written documentation.

It is always recommended to have a written contract to ensure that the terms of the agreement are clear and unambiguous. This provides evidence of the agreement in case of a dispute. Additionally, a written contract can include additional terms and conditions that may not be covered in an oral agreement.

In conclusion, an oral agreement is a legally binding contract made verbally between two parties. Although it is possible to create an oral agreement, it is always recommended to have a written contract for additional clarity and evidence in case of a dispute.