Verbal Contracts In Texas

Are Verbal Agreements Binding in Texas?

Unwritten Contracts

Verbal contracts are unwritten contracts that are sometimes called handshake agreements or gentleman’s agreements. In such agreements, it is up to the parties that have entered the agreement to carry out the obligations according to the provisions of the verbal agreement. When everyone that has entered the verbal agreement carry out their obligations and the necessary payments  are made, then no one should question the validity of the agreement. But there are situations when a verbal agreement goes bad and that is when people start wondering whether such agreements are legally binding. In Texas, there are some verbal agreements that are considered legally binding contracts.

Texas Contracts Law

Are text messages legally binding?

Only some verbal agreements are considered legally binding under Texas law. A verbal contract can be legally binding if it meets certain legal requirements like specificity and adequate consideration.  For a consideration to be considered adequate it must either involve mutual exchange between parties (bargained for exchange), or the parties agree to do something that they are not otherwise legally required to. However, verbal executory contracts are not enforceable unless they are in writing. Contracts that must be in writing to be enforceable according to the Texas Statute of Frauds include the following:

  • Making a will or trust
  • A contract for the sale of real estate
  • Sale of securities
  • Mineral interest
  • Any sales for goods costing $500 or more
  • Contracts that last for more than one year from the time they are made
  • Marriage except common law marriage
  • A promise to be answerable for the debt or default of another person
  • Guarantee, surety or any other contract to take up the duty of another
  • Agreements, contracts, or warranty of cure relating to medical care but not pharmacists
  • Oil or gas mining lease

How An Oral Agreement Can Be Enforced

a written contract in texasIs a handshake legally binding in Texas?

A fitting example of an oral agreement that can be enforced is when a contractor agrees to re-tile your shower for $900 in a week and you agree on it. If the contractor fails to do the work, you can enforce the contract in a court because it has adequate consideration. To prove that there was a verbal agreement in such a situation, you can present emails or text messages that document the oral agreement. You can also show the accounting of funds received or disbursed.  This also works in a situation where your order goods.  

But lawsuits for breaches on oral contracts can be more expensive because they are more difficult to prove. Even if the parties involved decide to go for mediation or arbitration to resolve the conflict, the complaining party may not get the result they desire. It is more secure to enter into written contracts because oral contracts can only be enforced in very few situations. Written contracts are clear and leave no room for ambiguity. That means that if one party breaches a written contract, all a complaining party needs to do is file a lawsuit asking a court to force the breaching party to meet their obligations as described in the contract.