Aldrich Law Firm, Ltd.
Aldrich Law Firm, Ltd.

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Can you enforce an oral contract?

In the business world, contracts can mean everything. This is true whether you are purchasing a product or service, doing business with a company or signing an employment agreement. What about oral contracts – agreements that are only made by a verbal affirmation and maybe a handshake? Are oral contracts legal in Nevada? Is a contract dispute arising from an oral contract admissible in court?

You can legally uphold an oral contract, states an article by the Las Vegas Tribune, if you have enough evidence that the terms in your agreement were clear and that you have a valid discrepancy. If, for example, you agreed in words to pay a neighbor to paint your house but he or she failed to complete the job, you might have enough legal ground for a business dispute – especially if you have proof that you paid the other person all or a portion of the amount agreed upon.

However, there is a law called the statute of frauds that outlines several types of business dealings that must be made in writing to be considered legally valid in Nevada. These include:

  • Any real estate contract
  • Transactions in the amount of $500 or more
  • Loans or credit exceeding $100,000
  • Agreeing to pay someone else’s debt
  • Business transactions expected to take longer than a year to complete
  • Matters involving trusts

Oral contracts are not recommended by most people in the legal profession because of their difficulty in proving breaches and enforcing terms. Relying only on another’s word can make it easy for the other side to commit fraud against you without much fear of the consequences. Also, Nevada’s statute of limitations for taking a breach of contract for an oral agreement to court is four years, instead of six years for a written contract.

While an oral contract can be enforceable in court, it is usually in your best interests to put your matters into writing. This information is intended to give you a general understanding of the topic but should not be taken as legal advice.

John P. Aldrich
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