Principal Attorney
“We shook on it.” A simple handshake or verbal promise might seem like a legitimate contract—but is it? Many Texans enter into verbal agreements every day, from promising to pay back a loan to agreeing to perform services. But what happens when one party fails to uphold their end of the deal? Can you enforce a verbal contract in Texas, or does everything need to be in writing?
At Sul Lee Law Firm, we help individuals and businesses understand their legal rights when it comes to contracts, including whether verbal agreements hold up in court. Here’s what you need to know about verbal contracts in Texas and when they are (or aren’t) legally binding.
Are Verbal Agreements Enforceable in Texas?
Yes, verbal agreements can be legally binding in Texas, but only under certain conditions. Like written contracts, verbal agreements must meet specific legal requirements to be enforceable. Under Texas contract law, an agreement must have:
- An Offer: One party proposes a specific agreement.
- Acceptance: The other party agrees to the terms.
- Consideration: Something of value is exchanged (money, goods, services).
- Mutual Intent: Both parties intend to enter into a binding contract.
- Capacity: Both parties must be legally able to make a contract (e.g., of legal age, mentally competent).
If these elements are present, Texas courts may uphold a verbal agreement. However, certain contracts must be in writing to be legally enforceable.
When Is a Verbal Contract NOT Enforceable?
Texas follows the Statute of Frauds, a legal doctrine that requires specific types of contracts to be in writing to be valid. If a verbal agreement falls under one of these categories, it will not hold up in court:
- Real estate transactions: Any agreement for the sale or lease of real estate lasting more than one year.
- Contracts that cannot be performed within one year: If an agreement cannot be completed within 12 months, it must be in writing.
- Guarantees to pay someone else’s debt: A promise to pay another person’s debt requires a written contract.
- Marriage agreements: Contracts involving marriage, such as prenuptial agreements, must be in writing.
- Sales of goods over $500: Under the Texas Uniform Commercial Code (UCC), any sale of goods worth more than $500 must have a written contract.
If your verbal agreement involves any of these situations, it is not legally enforceable in Texas without a written contract.
Challenges of Enforcing a Verbal Agreement
Even if a verbal agreement is legally valid, proving its existence in court can be difficult. Unlike written contracts, verbal agreements lack tangible documentation, making it hard to establish the terms and obligations.
Common challenges include:
- Lack of evidence: Proving what was agreed upon is challenging without emails, texts, or written notes.
- Conflicting memories: Both parties may recall the agreement differently.
- Witness credibility: If witnesses were present, their testimony may support or contradict claims.
Because of these challenges, written contracts are always the safest option. A written agreement provides clear documentation of the terms, helping to avoid disputes and protect both parties.
How Can You Strengthen a Verbal Agreement?
If you must rely on a verbal agreement, consider taking steps to make it more enforceable:
- Follow up in writing: Send an email or text summarizing the agreement. Even informal documentation can help support your case.
- Have witnesses: If possible, make the agreement in front of a neutral third party who can verify the conversation later.
- Begin performance: If one party starts fulfilling their part of the contract (such as providing services or making payments), it can serve as evidence of an agreement.
These steps do not replace a formal written contract but can help if a dispute arises.
What Happens If Someone Breaks a Verbal Agreement?
If a party fails to honor a verbal agreement, the other party may have legal options, including:
- Negotiation: Attempt to resolve the issue informally.
- Mediation or Arbitration: A neutral third party can help settle the dispute.
- Filing a Lawsuit: If the contract is enforceable, you may take legal action to seek damages.
A Texas court will examine the evidence, witness testimony, and circumstances of the agreement to determine whether it is legally binding.
Protect Your Interests with Sul Lee Law Firm
While verbal agreements can be legally binding in Texas, they come with significant risks. Without a written contract, proving terms and enforcing obligations can be challenging. If you are dealing with a contract dispute, business agreement, or need guidance on legal contracts, the team at Sul Lee Law Firm can help.
Don’t leave your agreements to chance. Contact us today to ensure your contracts are clear, enforceable, and legally protected.