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Is an Oral Business Contract Enforceable in Florida?

Posted on in Business Law

Sunrise business contracts attorney

It is not uncommon for family, friends, or business partners to come to an agreement over dinner, shake on it, and assume that everything will be taken care of. Since you have an amicable or trusting relationship with the person, you may not feel as if signing a legal contract is necessary for the work to get done. While this handshake may act as a substitute for signing on the dotted line, you may be unable to enforce this agreement if things begin to go south. For those who fall victim to such business relations, Florida legislation has addressed which oral contracts stand in court and which verbal agreements fall short in the eyes of a judge.

What Is the Statute of Frauds?

Since oral business agreements are fairly common, legislation has been put in place to note which agreements are considered invalid in a court of law. It is important to note these descriptions in the instance that you are considering going into business with a friend solely based on trust. The statute of frauds lists the following types of contracts invalid and unenforceable without the details outlined in writing and signatures from both parties:

  1. Sales of goods over $500 in value

  2. Sales of personal property over $5,000 in value

  3. Transferring land ownership from one party to another, also known as land conveyances

  4. Promises to pay off the debts of another party

There are a few ways to satisfy the statute of frauds, thus allowing the court to enforce the mentioned party’s performance. A contract for the sale of the property must contain all of the essential terms of the contract in writing, including the terms and time of payment. If these two details are left out of the contract, specific performance can be refused by the party. There have been a few instances in which verbal agreements for the sale of real property have been honored and enforced. In these cases, the purchaser was given possession of the property mentioned and either paid a portion of the purchase price or instead has made improvements to the property that were considered valuable and permanent. 

Despite these few exceptions, other cases have been lost despite the party’s possession of the property and the financial contributions that they put into the property in the meantime. As you can see, it is best to avoid making oral contracts because the enforcement of these agreements may not be as cut-and-dry as you think. The most important way to prepare for your defense, either as the enforcing party or the party who believes that he or she is exempt from the verbal contract’s terms, is to find a reputable business attorney who has experience working with such cases.

Contact a Broward County Business Lawyer

Every business contract has a unique set of details and complications. Reading between the fine lines can be difficult without a legal background in business law, even if you have run a company for years on end. Oral contracts bring on their own set of complications as amicable relationships turn the negotiation process from business to personal. The Elliot Legal Group, P.A. has assisted numerous businessmen and women throughout the state of Florida with their contractual difficulties. Whether you need help drafting, reviewing, or enforcing contracts, Attorney Gavin Elliot is a qualified Fort Lauderdale, FL business contracts attorney. If you have entered into a verbal contract and need legal help, call us today at 754-332-2101 to schedule a private consultation.

 

Sources:

http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0725/0725.html 

https://www.investopedia.com/terms/o/oral-contract.asp

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