Oral Contract

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Oral Contract

An agreement between parties that is either partly in writing and partly dependent on spoken words or that is entirely dependent on spoken words.

An oral contract is enforceable unless its subject matter comes within the statute of frauds, an English Law adopted in the United States, that requires certain contracts to be in writing. For example, a contract to sell real property, to be enforceable, must be in writing to comply with the statute. An oral contract to sell Personal Property for an amount less than that set in the statute does not fall within its limits and, therefore, is enforceable without being reduced to a writing. The Uniform Commercial Code governs the enforceability of oral contracts in sales transactions involving merchants.

oral contract

n. an agreement made with spoken words and either no writing or only partially written. An oral contract is just as valid as a written agreement. The main problem with oral contracts is proving its existence or the terms. As one wag observed: "An oral contract is as good as the paper it's written on." An oral contract is often provable by action taken by one or both parties which is obviously in reliance on the existence of a contract. The other significant difference between oral and written contracts is that the time to sue for breach of an oral contract (the statute of limitations) is sometimes shorter. For example, California's limitation is two years for oral compared to four for written, Connecticut and Washington three for oral rather than six for written, and Georgia four for oral instead of 20 for written. (See: contract, agreement)

References in periodicals archive ?
Now, a cynic would say that the Great Unwritten Contract is worth about as much as the paper it is written on.
The Canadian admitted that he never gave his workers he hired more than a three-month unwritten contract.
This first act started the unwritten contract that the people the of the UK have had with Royal Mail delivery staff: That is to deliver post on time, confidentially and by trustworthy personnel.
The shop owner took the arrest as a breach of an unwritten contract where he would receive special privileges in return for supplying free coffee and discounted meals.
This partially unwritten contract assures us of the freedom to create while it also poses limits to our creativity.
Pick the things that really matter, talk them out, and renegotiate the unwritten contract from time to time.
He has broken that unwritten contract, after the Gennifer Flowers (untrue) denial, that if we elected him he would change.