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Once you agree to do something, people generally expect you to do it—but are you legally obligated?

When two or more parties agree without written documentation, they create a verbal agreement (formally known as an oral contract). However, the authority of these verbal agreements can be a bit of a gray area for those unfamiliar with contract law.

Most verbal contracts are legally binding. However, there are some exceptions, depending on the agreement’s construction and the contract’s purpose. In many cases, it’s best to create a written agreement to avoid disputes.

For instance, employers, employees, and independent contractors may find it invaluable to document the terms of their agreements in an Employment Contract or Service Agreement. Although an oral agreement may be legally enforceable, it can be challenging to prove in court.

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