Let us say that two parties entered into a verbal or “oral”
agreement over the exchange of services. One of the parties holds up their
end of the deal, while the other party refuses to provide payment or deliver
what was promised.
Is the debt valid in spite of the fact that there was no written agreement?
Is a handshake required to make the agreement enforceable?
Are verbal contracts enforceable in Illinois? Yes, they are, and no handshake
is required for them to be legally binding. If the services were provided
by one of the parties, and those services were accepted by the other party,
then it is likely that the parties reached an enforceable agreement.
Even if a clear agreement cannot be found, as long as one party accepted
the other’s services, the receiving party benefited and the party
who delivered those services should expect reasonable payment for them.
Essentially, verbal contacts are as valid as written contracts in Illinois,
but they are more difficult to prove. While something such as a handshake
has no legal significance, having witnesses can strengthen a case.
One aspect that can strengthen an argument is the fact that one of the
parties fully performed their end of the agreement. Performance makes
an oral contract case easier to prove.
Statute of Frauds (SOF)
While oral contracts are enforceable in Illinois, there are exceptions
and these are determined by the Statute of Frauds (SOF), which governs
which types of contracts must be in writing. The contracts governed under
the SOF include:
- Contracts involving selling an interest in land;
- Contracts where the performance is longer than one year;
- Contracts assuming the responsibility for another person’s debt;
- Contracts involving the sale of goods valued over $500; and
- Certain promises made by executors and administrators of an estate.
While it is always best to put a contract in writing, you still may have
a valid claim against the
breaching party. To determine if your verbal contract is enforceable in Illinois,
Chicago business law attorney from Rifkind Patrick LLC.