Answer:
Yes. Binding contracts can be verbal agreements, they can also be written agreements, and they can be a combination of both. In any case, parties to a contract are only bound if the agreement has satisfied the basic requirements of forming a legally enforceable contract;
- Offer and acceptance;
- All terms agreed upon by both parties;
- An intent to be bound;
- Consideration (an exchange of a promise. eg the giving of money as payment or ‘in consideration’ for the purchase of a boat).
If the above requirements are satisfied then a legally enforceable contract can indeed be created through verbal agreements. But, a verbal agreement cannot be created from the simple exchange of words or promises between two parties, there needs to be a clear intent to be bound by those promises and some demonstration of fulfilling those promises.
Verbal contracts are however very difficult to enforce especially if there is any confusion regarding specific terms or if a dispute arises. When specific terms are not written down, are too general, or come from promises made a long time ago that neither of the parties remember correctly, it becomes one person’s word against another and there can be considerable effort put into figuring out what the terms of the agreement actually were.
For this reason, any legal contract you wish to form should be in writing, signed by both parties and witnessed by a third, to provide clarity on terms and guarantee that the contractual promises can be enforced.
