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Can a verbal promise in the business context be legally enforced?

On Behalf of | Mar 17, 2022 | Business Law, General Litigation |

A lot of small businesses pride themselves on building strong personal relationships with those they do business with. These trust-based relationships can lead to efficiency and profitability, but they can also lead to corner-cutting, especially as it relates to the utilization of contracts.

This is most often seen when a business owner foregoes written contractual agreements in favor of verbal promises. But it just takes one of these promises to go unfulfilled to put a business in a dire financial predicament. If you’re dealing with an issue involving a verbal promise, then you may be asking yourself whether the promise is even legally enforceable.

Is a verbal agreement legally valid?

It really depends on the circumstances. When a judge looks at one of these cases, he or she is going to consider a number of factors, including each of the following:

  • The parties’ history of relying on verbal promises in its business dealings
  • Whether an actual offer was made, meaning that an unrealistic verbal promise is less likely to be found to be enforceable
  • Whether the party who accepted the promise relied on that promise to its detriment

The detrimental reliance aspect of these cases is key. To show detrimental reliance, the wronged party will have to show that there was financial harm caused by the reliance, such as missing out on another favorable contract.

Do you need an advocate on your side?

If you’re facing a contractual dispute, then you need to know how the law applies to your set of circumstances. After all, that’s the first step in protecting your interests in these matters. So, if you’d like to learn more about what you can do to position yourself for success in your case, then you may find it beneficial to discuss your circumstances with an experienced business law attorney.