Oral contracts: stronger than oak?
Have you ever made or wanted to rely on an informal verbal agreement but assumed that it could not be legally enforced?
In the 1996 movie ‘Jerry Maguire’, Tom Cruise plays a professional sports agent whose world falls apart when the father of an American football prodigy, Frank Cushman, reneges on a purely verbal agreement for the representation of his son and signs a written contract instead with another agent. The title character had previously been assured by the defaulting party: “I don’t sign contracts, but what you do have is my whole word, and it’s stronger than oak”.
Leaving aside unknown gaps in the film such as contractual capacity and whether or not all the key terms were agreed between the parties, if the film’s eponymous hero had made his agreement in Northern Ireland and had the benefit of proper legal advice, he might have retained his star client.
In this jurisdiction, aside from some specific exceptions such as certain contracts for the sale of land, a legally binding agreement can be made informally and without any need for a formal written contract between the parties. Important agreements, even in the commercial world, are sometimes made by simple word of mouth or are contained in or evidenced by documents which have not been signed by the parties. Such agreements are no less valid or enforceable than formal written contracts, although they may be more difficult to prove if disputed.
In short, if someone refuses to honour an oral agreement that you want to rely on or is denying the agreement’s very existence, don’t just assume that there is nothing you can do. Subject to the presence of the key elements of any contract (including offer, acceptance, consideration and intention to create legal relations), you may have sufficient grounds and evidence to enforce it.
Notwithstanding the above, if you are making an important commercial agreement, the best course is usually to obtain legal advice at an early stage with a view to entering into a formal written contract. Oak might not be stronger than a person’s word of honour, but it is generally more reliable.
While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.