Written contracts exist so that there is physical proof, a record of what two or more parties agreed to at signing. For example, when starting a new job or modifying one's current position, terms for employment will be set and documented in a written contract. When discussing the contract, though, oral agreements may be made, and those agreements generally become a part of the contract -- even if they are never written down. Are oral contracts legally binding in the state of California?
To be clear, an oral contract is defined as terms agreed upon through spoken communication. There is no formal contract signing. Yes, oral agreements are legally binding in the state of California -- under certain circumstances.
The big problem with these types of contracts is establishing proof that they exist. It is extremely easy for one party to deny entering into an oral contract. If a breach occurs, there are a few ways one may seek relief, but first, it is necessary to provide evidence that an oral agreement was actually put in place. A few ways to do that include:
- Identifying witnesses present when the contract was created
- Reviewing the actions of both parties
- Gathering letters, emails, bills or any other physical evidence that supports the existence of an oral contract
When it comes to an employment contract, written is always best. If oral agreements are made in conjunction with the written contract, one may want to hold off on signing anything until the oral agreements are added to the written contract. California residents who entered into employment contracts that included oral agreements and are now dealing with a contract breach can turn to legal counsel in order to determine if anything can be done about it.