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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10915
Experience:  Solicitor with 5+ years experience
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how legally binding is a verbal contract?

Customer Question

how legally binding is a verbal contract?
Submitted: 2 years ago.
Category: Law
Expert:  Jo C. replied 2 years ago.
Hi.

Thank you for your question. My name is Jo and I will try to help with this.

An oral contract is as good as a written one in law.

The only difference is proving what was agreed which is obviously easier if reduced to signed writing.

However, there is no difference in law otherwise. Most contracts are oral.

Can I clarify anything for you ?

Jo
Customer: replied 2 years ago.

good evening, please help.


Last October we embarked on a new business venture which has unfortunately gone very wrong. August Bank holiday 2013 we were booked by Blackbrook Zoological park in staffordshire to exhibit our private reptile collection for the day. The event went really well and at the end of the day we were approached by the then manager who asked if we would be interested in working on behalf of the zoo and going into schools on their behalf raising funds via sponsored events. We were very keen to help as the zoo is a charity and we love animals, no brainer. We riposted by enquiring as to the possibility of moving our collection to the zoo and becoming a permanent exhibit. They agreed that that would be a fantastic idea, so we set about putting together a proposal. Our proposal consisted of a free 5 year lease on a then run down and unused building, our £25,000 initial investment in the refurbishment of the building and on going work to be carried out throughout the term of lease would be our way of paying rent for the building. At the end of the 5 years a new contract would be negotiated pending all refurbishment was complete. We were agreed that we would receive 12.5% of gate receipts to fund the facility. This was to be run in conjunction with the sponsored events which alone were forecast to earn the charity within the region of £80,000 in the first year. This sum didnt include the extra revenue that would be earnt through extra footfall created by us going into the schools and engaging the children, thus meaning that a percentage would want to come to the zoo.


To cut a long story short, all of the above was agreed in principle, in front of witnesses, a hand shake took place and we agreed to move forward with the construction work whilst the agreed document was sent to a solicitor to be typed up and made legal. We didn't suspect anything at this time as we thought nobody would hide behind the front of a charitable organisation. We constructed our business plan based around the contract which we had agreed and approached the bank for funding. Funding was granted and we moved everything to the zoo, we moved house, our boys moved school, we gave up full tie jobs etc etc etc. 2 months after staring the work we asked as to the stage that the contract was at and the owner said that we were not to worry, the solicitor had it in hand and it would be with us very soon. We were sceptical at this point but were already well engaged in the refurb and soldiered on. A further month passed and when questioned again he admitted that he had never sent it to the solicitor and that he had no intention of doing so, we subsequently downed tools. The park is now in administration as the owner was acting illegally as sole trustee of the charity whilst also being the major creditor whilst accruing large debts against the zoo in the guise of 2 further trading companies.


our question is, does our agreement, as a verbal agreement hold any sway in a court of law?


 

Customer: replied 2 years ago.

please can you help us jo.

Expert:  Ash replied 2 years ago.
Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply, but rest assured I will be giving your question my immediate attention upon return You do not need to wait here as you will get an email when I reply.

A verbal agreement is binding in law. Its like when you go to a shop and buy a newspaper. No written contract but oral.

The civil procedure rules say where there is an oral contract you must:

Where a claim is based upon an oral agreement, the particulars of claim should set out the contractual words used and state by whom, to whom, when and where they were spoken.

Can I clarify anything for you about this today please?

Alex

Expert:  Ash replied 2 years ago.
If this answers your question could I invite you leave feedback on my service which I hope has been excellent today, if you need more information or help then please click reply.

Please remember that I am always happy to help if you have future questions, even if I am in Court I can normally respond within a few hours. For future information, please start them with ‘For Alex W’.

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