When it comes to making agreements, not all of them are written down. In fact, many important agreements are made orally, or through spoken communication. However, just because an agreement isn`t written down doesn`t mean it`s not legally binding. This is why it`s important to understand the terms of an oral agreement.
An oral agreement is an agreement that`s made verbally, without any written documentation. These types of agreements are common in many industries, particularly in business, where deals are made over the phone, in meetings, or even over lunch. Examples of oral agreements include verbal contracts, agreements between friends, and handshake deals.
Despite the lack of written documentation, oral agreements are still legally binding. This means that if either party fails to uphold their end of the bargain, legal action can be taken against them. However, proving the terms of an oral agreement can be difficult, which is why it`s important to understand the key elements of these types of agreements.
One of the most important elements of an oral agreement is the offer. This is the promise or proposal made by one party to the other. It`s important that both parties understand the offer and agree to the terms. Once an offer has been made, the second party must accept the offer. This can be done verbally or through action.
The second element of an oral agreement is consideration. This is the price or compensation that one party agrees to give in exchange for the other party fulfilling their end of the bargain. Consideration can take many forms, including money, goods, and services.
The third element of an oral agreement is the intention to create legal relations. This means that both parties must intend for the agreement to be legally binding. If either party doesn`t intend for the agreement to be legally binding, then it`s not considered a legally binding agreement.
Finally, the terms of an oral agreement must be clear and certain. This means that both parties must understand the terms of the agreement and be able to fulfill their end of the bargain. If the terms of the agreement are unclear, then it`s not considered a legally binding agreement.
In conclusion, even though oral agreements lack written documentation, they are still legally binding. Understanding the key elements of these types of agreements, including offer, consideration, intention to create legal relations, and clear and certain terms, can help ensure that both parties uphold their end of the bargain and avoid legal disputes.
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