Is a Verbal Agreement Binding in New Jersey?

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According to New Jersey law, most verbal agreements in the state are binding. However, someone hoping to enforce the contract has the legal burden of showing that a valid contract existed. This task can be more complicated when the terms of an agreement are not spelled out in a written contract.

Elements of a Binding Contract

For any contract to be enforceable in New Jersey, whether verbal or written, certain elements must be proven. For example, the person seeking to enforce the contract must show that one of the parties made an offer of some sort and that the other party accepted this offer. Consideration is also required, which is something of value that each party gives up in order to form the contract. The parties must have had a meeting of the minds as to the terms of the contract. The terms must also be reasonably certain so that a court can see the basis of the agreement.

Employment Contract

In addition to the other elements of a contract mentioned above, employment contracts require additional elements. New Jersey is an at-will employment state, meaning that either the employer or employee can terminate the relationship for any reason, so long as it is not an illegal reason. To get an employment relationship out of this realm, the employee must prove three things:

  1. There was a definite, clear oral promise of employment;
  2. The person making the promise of employment was authorized to make it and bind the employer to it; and
  3. The employee relied upon this promise

Statute of Frauds

Some types of contracts must be in writing and signed by the person against whom enforcement is sought or the court will not enforce them. In New Jersey, this includes contracts regarding:

  • agreements based upon the consideration of marriage
  • loans for more than $100,000
  • agreements by creditors to forbear their rights to seek a remedy based on a contract or promise
  • agreements to provide support to another person who is not his spouse

Proof of Contract

The issue with many oral contracts is not whether they are actually binding but rather if they can be proven. Whereas a written contract can be analyzed by the document itself, oral contracts require additional proof that they actually exist. A court can consider the relationship between the parties and if there are any documents that indicate the existence of an oral contract. For example, proof of an oral contract may consist of a check in which you paid for a service or goods, the fact that you are in possession of the goods or the fact that the other party began a service. Communications between the parties sent via email or text message may also help establish that a contract existed.

Read More: How Does a Contract Work?