If you'd like to collect on an oral contract that hasn't been honored then it's critical that you demonstrate that the agreement existed in the first place. There’s a cliché that suggests that “a verbal contract is only worth the paper that it’s printed on,” but in reality that’s not true. In many cases a verbal contract is legally binding in a court of law. Here's how to prove that it exists.
How To Prove a Verbal Agreement
Verify that your agreement is, in principle, legally enforceable. Although standards vary from jurisdiction to jurisdiction, in general the following rules apply: 1) Verbal contracts must govern an exchange of goods or services. If you promise to give Jimmy $15 in return for nothing, that contract is not legally enforceable. However, if you promise to give Jimmy $15 to mow your lawn then you’ve entered into a legally binding oral contract. 2) Verbal contracts are not binding for goods or services that cost more than $500, or for services that take more than a year to render. 3) Verbal contracts cannot be made for creditor/debtor arrangements or for the sale of land.
Provide witnesses to the agreement. If other parties were present when the contract was agreed upon then their testimony will often be sufficient grounds for proving that the contract exists. If you have more than one witness then your odds of the contract being accepted increase substantially. Your chances are even better if the witnesses are impartial observers. For example, in a construction dispute the word of a third-party contractor carries more weight than the word of your spouse or one of your employees.
Check your paper trail. Even if you don’t have a signed written contract detailing the terms of an exchange or an audio recording of a verbal agreement, it’s still possible to use documentation to prove that a disputed verbal contract was agreed upon. To do so, you must demonstrate evidence of actions taken by either party that indicates the existence of a verbal contract. Inspect e-mails, voice mails, or other recorded exchanges for indirect proof that the other party agreed to the contract. For example, an e-mail from a client promising that he’ll pay you next month can serve as sufficient indirect proof that a contract was initially agreed upon. There are often limitations to what can be demonstrated by indirect documentation; in the above example the client's e-mail proves that a verbal contract exists but says nothing about the terms of the contract (such as the particular exchange that was agreed upon or the compensation that was promised).