Business deals often start with a conversation, lead to handshakes, and, ideally, signatures. However, sometimes things move too quickly, especially in fast-paced industries, and partners and business owners leave with nothing more than a verbal agreement.
But, what happens when those verbal agreements are disputed? Can a business owner hold someone accountable without a written contract?
Florida law does recognize verbal agreements under certain circumstances, but relying on them can be risky. Without clear documentation, proving what was agreed upon becomes challenging, and disputes can lead to costly business litigation. Understanding when a verbal contract may hold up in court—and when it won’t—can help business owners protect their interests.
Verbal Contracts Do Have Some Legal Weight
Florida law allows certain verbal agreements to be legally enforceable, but only when specific conditions are met. One factor is whether the agreement could reasonably be completed within one year (or a reasonable timeframe given the subject of the agreement). If so, courts may recognize it as a valid contract, assuming both parties clearly understood and agreed to the terms.
Even if an agreement meets that requirement, proving its existence can be difficult. The law requires that the terms of the contract be fully agreed upon, not loosely discussed. If key details were never finalized or there was no mutual understanding, a court may determine that no valid contract existed.
Florida law does have exceptions. Certain agreements must be in writing to be enforceable, including contracts related to real estate transactions, loan agreements, and guarantees for another party’s debts. Relying on a handshake for these agreements could leave a business without legal recourse.
When a Verbal Contract is Acted On
In cases where a verbal agreement is disputed, courts often look at the actions of both parties to determine whether a contract existed. If both sides acted in a way that supported the terms of the agreement, it strengthened the argument that a contract was in place.
For example, if one business partner verbally agrees to handle vendor relationships while another manages financials, and both parties operate under that arrangement, it suggests that an agreement existed. However, proving that a contract was ever made becomes much more complicated if responsibilities were shared or ignored.
Courts also consider whether one party relied on the agreement to their detriment. If a business owner spent money or made commitments based on a verbal agreement, that could be used as evidence to enforce the contract. However, relying on actions alone comes with risks, making written agreements safer.
Avoid and Resolve Costly Business Litigation in Florida
Business disagreements over verbal agreements can turn into expensive legal disputes. Protecting your business means having clear, legally binding contracts in place. If you’re currently facing a contract dispute or want to strengthen your business agreements, taking action now can prevent unnecessary risk. Call the Law Office of Ray Garcia to get legal counsel on how legally sound contracts can protect your business from uncertainty and future litigation.
Garcia & Garcia Attorneys at Law
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