Gavin Tudor Elliot, owner of the Elliot Legal Group, P.A., brings decades of business law experience – in and out of the courtroom and across the globe – to ensure that your company is positioned for success.
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Here, Gavin clarifies the ins and outs of oral business contracts in Florida.
Throughout my 20-plus years of practice, and especially recently, I have had substantial involvement in enforcing oral contracts, and in doing so, I have obtained significant payouts for my clients. While there are some situations where courts in Florida may enforce oral contracts, it is essential to understand the limitations that apply. It may be more difficult to enforce these types of contracts since, without a written contract, the parties may be unable to prove the terms, the classic he said she said, and there may be legal principles that prevent enforcement.
Offer, Acceptance and Consideration
That letter your Auntie had you sign when you were a kid is not enforceable, at least in a court of law. I believe my brother would still honor his in order to keep the peace. There must be a “meeting of the minds,” and all parties to a contract must have been of sound mind and capable of understanding and being bound by the contract. One party must have made an offer, such as stating that they will pay a certain amount in exchange for goods or services, and the other party must have accepted that offer. Each party must receive consideration in exchange for their performance of the contract’s terms, which may include receiving money, goods, or services.
Material Terms Must be Defined
A contract must include all necessary elements to be a valid legal agreement. This does not mean every detail needs to be spelled out, but the material ones do. Some examples of material terms are product or service and amount or type of payment. Issues such as timing can often be determined based on industry practice or other standards. If someone gives you something with no terms or conditions, that is a gift, not a contract.
The Statute of Frauds
A primary obstacle to enforcing oral contracts is a legal concept known as the statute of frauds. Generally speaking, this concept provides that contracts involving interests in real property, or that cannot be performed in a year, must be in writing to be enforceable. However, there are exceptions to this rule. One of the primary exceptions to this rule is the concept of performance. What this means is, if someone asks you to do something and promises to do something in return, and you do that thing, you may have an enforceable agreement.
Other Remedies
Just because you do not have an enforceable contract does not mean you are at the end of your options. Principles such as detrimental reliance, unjust enrichment, and even fraud may allow you to prevail even though there was no contract. There are also a variety of statutory remedies that may provide you the ability to enforce your rights.
If you have entered into an oral contract with someone else, you will want to determine how you can protect your rights. If disputes arise, one party may be able to pursue litigation to enforce the contract and/or require the other party to pay damages, although for damages you will typically need to demonstrate that you have been harmed by the other party’s failure to honor their promise to you. If you are looking to enforce an oral contract, or if you want to know about your options in situations where you are accused of breaching an oral contract, contact our Fort Lauderdale contract litigation attorney at 954-686-4933.
