Verbal agreements


Peter: “Nice watch! Can I buy it? I’ll give you 200 euro for it!” Hans: “Good deal - done!”

Does the conversation above constitute a verbal agreement? Does the agreement first have to be written and signed before it is legal? Are all verbal agreements legally binding?
Legally, an agreement is reached by making an offer and having the offer be accepted. In the example above, the first statements from Peter constitute the offer and the second statement from Hans is the acceptance of the offer. In principle, a verbal agreement is legally binding and can be enforced.

The offer must be accepted immediately for the agreement to be valid in verbal contracts. A rental agreement that is verbally offered and is immediately accepted is therefore a legally binding agreement. Even verbal changes to a written rental agreement, which have been agreed upon by landlord and tenant, are legally binding. A verbal notification of termination of the rental agreement between tenant and landlord is also legally binding. Both parties must agree on the conditions.

However, not all verbal agreements are legally binding. For example, a verbal agreement to buy a house is not legally binding but must be recorded in writing for it to be legal. Often, it is wise to make a verbal agreement. Most people don’t realize how often we do this. To give one example: if you go to a restaurant and order steak with fries, you are making a legal transaction, because you accept the offer from the restaurant for the cost of the meal. Even for more expensive transactions, a sales contract is not necessary, but it is handy.

Although a verbal agreement can be made between two parties and it is legally binding, it is difficult to prove. If one of the two parties wants to get out of the verbal agreement, and denies that the agreement took place, then the other party does not have proof that there actually was a concluded agreement. Even if the two parties agree that there was a verbal agreement, there can also be differences of opinion on the content of the agreement.
Thus, a verbal agreement is usually legally binding, with the exception of the verbal agreement to buy a house. However, a huge drawback to a verbal agreement is the proof that an agreement actually occurred and what the contents of the agreement were.

To summarize:  put important agreements in writing. If you have a conflict concerning a verbal agreement, then it is smart to have proof. If you are not sure if you have enough evidence to prove the verbal agreement, then it is wise to contact a lawyer about your legal situation. A lawyer can also give you tips about your specific situation in order to gather extra evidence.