Verbal Agreement – Are They Valid?

Your word is your bond. Often there are many verbal agreements, but many are broken because the parties cannot remember the precise terms of the agreement. Or the parties never truly intended to enter into a legally binding agreement. This is a recipe for disaster for people who rely on the verbal agreement.

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Is a verbal agreement legally binding in the UK?

Yes, a verbal agreement can be legally binding in the UK. In fact, there is no requirement for a contract to be in writing in order to be enforceable. However, there are key requirements that must be met for a verbal agreement to be legally binding in England and Wales. These include:

• There must be an offer and acceptance.
• There must be consideration.
• There must be an intention to create legal relations and no undue infleunce.

If these requirements are met, then a verbal agreement will be just as binding as a written contract. Our article on Commercial Contracts and Remedies explains what actions can be taken in a written contract broken.

Can you sue someone for breaking a verbal agreement?

Yes, you can sue someone for breaking a verbal agreement in the UK. However, it is important to remember that proving a verbal contract was made can be difficult. This is because there is no written record of the agreement, so you will need to rely on witnesses/ email or messages confirming terms of the agreement.

If you are considering suing someone for breaching a verbal contract, it is important to speak to a verbal contract disputes lawyer to discuss your options. A lawyer can help you to gather evidence to support your claim and to represent you in court if necessary.

What Preliminary Steps Should I Take Before Seeking Legal Advice?

Gathering the key documents at an earlier stage will assist in presenting your case in a clear and persuasive manner. Write down as much information as possible about the discussed terms, including who said what, when, and where.

What are the costs for enforcing a verbal contract?

For consumers and businesses, we offer a number of funding arrangements for breach of verbal contract disputes such as Fixed Legal Costs Litigation.

Parties involved in a verbal contract disputes should consider whether early mediation is a possibility to negotiate a settlement. Mediation can be highly successful. For more information, read our blog Mediation and Alternative Dispute Resolution (ADR).

Case Study

Pints in a London pub, two millionaires and an alleged verbal agreement – what could go wrong? In the case of Jeffrey Blue Vs Mike Ashley [2017] EWHC 1928 (Comm), on 24 January 2013 Mr Blue alleged that Mr Ashley verbally agreed that he would be paid £15 million if the share price of Sports Direct rose from (the then trading level) around £4 per share to above £8 per share. The share price did hit this level on 25 February 2014 and Mr Blue sought to enforce the alleged verbal agreement.

Mr Ashley accepted there may have been some conversation, but denied that any such verbal contract had been made. In May 2014, Mr Ashley made a payment to Mr Blue of £1 million in May 2014. Mr Ashley claimed this was a general bonus. Mr Blue claimed this was part-payment and an acknowledgement of the verbal contract on 24 January 2013.

The Court decided in Mr Ashley’s favour and the case was dismissed. Here are some of the key points from the judgment:

• An agreement can be formed in a conversation, even if there is no written record of the agreement.
• The parties to a verbal contract must intend to create legal relations.
• The terms of a verbal contract must be clear and unambiguous.

The Court stated the fact Mr Blue believed there was a verbal contract “shows only that the human capacity for wishful thinking knows few bounds.” For people in London who are searching for guidance on verbal contracts, the judgment in Blue v Ashley is a valuable resource. It provides clear guidance on the requirements for a verbal contract to be formed, and highlights the importance of clear and unambiguous communication when entering into agreements.

Contact Us

If you are in London and are seeking a verbal agreement lawyer, we can help your case. To book a Free Consultation Call, with Mr Usman Anwar Legal Director, you can complete the Contact Us Form or email us on hello@anwarlegal.co.uk

Still not convinced? Read some of our business client’s success stories and testimonials on how they settled their business disputes using our legal service.