Are all oral contracts valid?
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The short answer is no.
Generally, oral contracts will be enforced, so long as the basic elements of a contract are present: an offer, an acceptance, an exchange of consideration, and a “meeting of the minds” on the specific terms of a contract. Non-essential terms of the contract need not be settled to render an oral contract enforceable. A promise by one party to another may be enough to satisfy the requirement of consideration.
The general rule is, however, subsumed by exceptions. In most jurisdictions, the “statue of frauds” requires that certain contracts must always be in writing. These statutes are based on a 17th century English law entitled “An Act for the Prevention of Frauds and Perjuries.” Though the English statute has since been repealed, most every state has adopted similar laws, either through statute or through common law. The point of the statute was to avoid “fraud” in high-stakes situations, whereby one party denies the existence of a valid oral contract, or conversely, fabricates a non-existent oral contract.
Examples of contracts that are often required to be in writing, depending on the jurisdiction, include: prenuptial agreements; contracts for the purchase or sale of land; contracts by the executor of a will to pay the debt of an estate; guaranty contracts or other promises to pay debts of others; and contracts that cannot be performed within the span of one year. In Florida, a subscription for a newspaper or magazine is unenforceable unless it is in writing.
States may have other exceptions to the general rule that an oral contract is enforceable. Florida, for instance, does not generally permit an oral contract to rescind or cancel a written contract. To rescind or terminate a written contract, the parties must execute a subsequent written agreement, though exceptions to this rule exist.
Please Note: McCabe Rabin, P.A. provides these FAQ’s for informational purposes only, and you should not interpret this information as legal advice. If you want advice as to how the law might apply to the specific facts and circumstances of your case, please contact one of our attorneys.