Oral Contracts And Oral Modifications To Contracts
It is a common misconception, particularly among non-lawyers, that contracts must be in writing to be enforceable. That is true some of the time, but the general rule is that oral agreements are enforceable, so long as the requirements for a contract are met. A contract is a legally enforceable promise or set of promises. An enforceable contract requires an offer, acceptance, and consideration. The contract, once valid, involves one or more promises. In contract law, “A promise is an expression that justifies the person to whom it is made in reasonably believing that a commitment has been made that something specific will happen or not happen in the future.” Washington law recognizes that, “A promise may be expressed orally, in writing, or by conduct.”
Keep in mind that some kinds of contracts are still required to be in writing to be enforceable, under what is known as the “statute of frauds.” The statute of frauds is a law designed to prevent parties from fraudulently claiming the existence of certain kinds of contracts. You can learn more about the statute of frauds here: https://beresfordlaw.com/what-is-the-statute-of-frauds/. Of course, the statute of frauds is the exception, not the rule; most oral contracts are still enforceable.
Just as many people assume that only written contracts are enforceable, people often similarly assume that written contracts cannot be orally modified. Washington courts have held that a contract may generally be modified or abrogated by the parties thereto in any manner they choose. This principle comes into play with particular force when a written contract contains a provision forbidding oral modifications. The typical provision may read something like, “This contract may not be modified unless such modification is in writing and signed by both parties.” For this type of situation, courts have held that an oral modification can still be valid! One court has said, “A paradox of the common law is that a contract clause prohibiting oral modifications is essentially unenforceable because the clause itself is subject to oral modification. The common-law rule has been lauded as allowing parties to quickly modify their contractual obligations when faced with unforeseen circumstances, and has been consistently followed in Washington.” This quote shows how courts take practical realities into account- a requirement that modifications always be in writing would often frustrate the parties’ ability to be flexible and adapt to new circumstances by imposing an undue burden of formality and inconvenience.
Even though oral contracts may be enforceable, that does not mean oral contracts are advisable. Reducing an agreement to writing helps to avoid both ambiguities and disputes over the existence of the contract. Generally speaking, the written contract is the best evidence of both the fact that the parties agreed and what they agreed to. Because the party seeking to enforce a contract generally bears the burden of proof to show what the parties agreed to, written agreements are often critical for meeting that burden of proof and avoiding a situation where a court throws its hands up and refuses to grant relief because it can’t tell who’s telling the truth. This is the practical reason why people often assume that only written contracts are enforceable; it comes down to a question of proof of the agreement’s terms, rather than a question of the agreement’s validity.
The lawyers at Beresford Booth have a wealth of experience in drafting, reviewing, and litigating contracts. We would be happy to assist you.
To Learn More Oral Contracts And Oral Modifications To Contracts, please do not hesitate to contact us at info@beresfordlaw.com or by phone (425) 776-4100 for assistance.
