Principal Attorney
Contracts are the foundation of countless business transactions, but not all agreements are written down. In fact, many business dealings begin with a simple handshake or a phone call. So what happens when someone breaks their end of a verbal agreement? In Texas, the answer may surprise you: yes, you can sue for breach of a verbal contract, but the process comes with challenges and limitations.
At Sul Lee Law Firm, we guide Texas business owners, entrepreneurs, and professionals through the complexities of contract disputes, whether written or verbal. Understanding your rights under Texas law is the first step to enforcing them.
Are Verbal Contracts Legally Binding in Texas?
Yes, Texas law recognizes and enforces oral (verbal) contracts, provided certain conditions are met. A verbal contract is just as legally valid as a written one, as long as it meets the core elements of a contract:
- Offer: One party proposes a specific agreement.
- Acceptance: The other party agrees to the offer.
- Consideration: Something of value is exchanged (goods, services, money, etc.).
- Mutual intent to be bound: Both parties intended to create a binding agreement.
- Legal capacity: All parties are capable of entering a contract.
If these elements are present, a verbal agreement can be legally enforceable. However, proving that a verbal contract exists—and was breached—can be far more complex than enforcing a written one.
When Are Verbal Contracts Not Enforceable?
While many verbal agreements are valid, Texas law requires certain contracts to be in writing under the Statute of Frauds. If your agreement falls into one of the following categories, it must be in writing to be enforceable in court:
- Contracts for the sale of real estate
- Agreements that cannot be performed within one year
- Promises to pay someone else’s debt
- Contracts involving marriage or prenuptial agreements
- Agreements for the sale of goods over $500 (under the UCC)
If your verbal contract involves one of these scenarios, courts will generally not enforce it unless it’s in writing.
How Do You Prove a Verbal Contract Exists?
The biggest challenge in suing for breach of a verbal contract in Texas is proving the agreement actually existed and what its terms were. Because there’s no physical document to rely on, courts will look to the following types of evidence:
- Witness testimony: Did someone overhear or participate in the agreement?
- Emails, texts, or written notes: Do communications reference the verbal agreement?
- Conduct of the parties: Did both parties act in a way that shows a contract existed?
- Partial performance: Did one party start or complete their part of the bargain?
The more supporting evidence you have, the stronger your case will be. Without solid proof, it may be your word against theirs, which rarely results in a favorable ruling.
What Are the Legal Remedies for a Breach?
If you can establish that a valid verbal contract was breached, Texas law allows several potential remedies, depending on your specific situation:
- Monetary damages: Compensation for financial losses directly resulting from the breach.
- Consequential damages: Additional losses that stem from the breach, such as lost profits.
- Specific performance: In rare cases, a court may order the breaching party to perform their part of the contract.
- Rescission: Cancellation of the contract and restoration of any benefits exchanged.
The type and amount of damages you can recover depend on your ability to prove both the contract and the losses you sustained due to the breach.
When Should You Call an Attorney?
If you believe someone has violated a verbal agreement with you, it’s essential to act quickly. Texas has a four-year statute of limitations for breach of contract claims, including oral contracts.
An experienced attorney can help you:
- Determine whether a verbal contract exists under Texas law
- Evaluate the strength of your evidence
- Calculate the damages you may be entitled to
- Represent you in negotiations or litigation
At Sul Lee Law Firm, we work closely with business clients to resolve contract disputes efficiently and effectively, whether through negotiation, mediation, or courtroom litigation.
Protecting Your Business Moving Forward
While verbal contracts can be enforceable, they’re far more vulnerable to disputes and misunderstandings. Whenever possible, put your agreements in writing. A well-drafted written contract not only strengthens your legal position but also clarifies responsibilities and expectations, preventing conflicts before they arise.
If you’re dealing with a breach of a verbal agreement or want to ensure the security of your future contracts, Sul Lee Law Firm is here to help. Contact us today for a confidential consultation.