Once you promise verbally, you normally assume that you will do it. But, are you legitimately bind to do it? When two or more people settle to an agreement with none written documentation, they devise a verbal agreement (recognized legally as a verbal agreement). The authority of those verbal agreements, though, however, can be a chunk of a grey location for people who are not familiar with contract regulation
Generally, most verbal contracts are legally binding. However, there are few exceptions, reliant on the structure of the agreement and the reason for the agreement. In many cases, it’s nice to devise a written agreement to avoid disagreements.
For the sake of clarity, a Contract is a formal process and can be both; in words or verbal. Agreements can be a former level to the creation of a valid contract. This can happen after all the essential elements of the contract are present.
So, you might agree to help a friend manage his portfolio, but it cannot be liable as a contract until both parties are aware of several other elements of the contract. For a valid contract to be recognizable by the law, consideration plays a critical role.
ESSENTIAL ELEMENTS OF A VALID CONTRACT:
What makes an Agreement lawful is the initial aspect to discuss. The procedure of making a lawful agreement starts from statutory provisions given in the Indian Contract Act.
Under Section 10 of the Contract Act – All agreements are contracts if they are made by the free consent of parties capable to contract, for a legal consideration and with a lawful object, and are not hereby expressly acknowledged to be void.
Section 9 also states that where there is a proposal of any verbal promise, the acceptance makes it valid. And to whom such an offer is made signifies his assent and the offer is accepted. Subsequently, after acceptance, it develops into a promise.
JUDICIAL VALIDITY OF VERBAL AGREEMENT:
A verbal agreement is as correspondingly binding. The authenticity of a verbal agreement is not questionable if it falls underneath the ambit of the essentials in section 10 of the Indian Contract Act, 1872.
In the stern intellect, it is not indispensable that a contract must be in words. Unless it is need of the prevailing or the parties, the agreement need not be changed.
The same judgment was restated by the Supreme Court in a dispute between ALKA BOSE VS PARAMATMA DEVI and ORS whereby the Court held that a sale agreement can be verbal and have the same requisite value and enforceability, as a written agreement.
The agreement should be consistent with the essentials under section 10 of the Indian Contract Act. Consequently, it will have the equivalent power of evidentiary worth, like the one in words.
CAN VERBAL AGREEMENT BE ADMISSIBLE IN COURT OF LAW AS EVIDENCE?
As per the contract act, a valid verbal agreement can be enforced in the court of law. However, it is always problematic to verify its existence or the precise terms of the agreement, in case of disagreement.
Section 92 of the Indian Evidence Act providently debars verbal agreement as a piece of admissible evidence in court proceedings.
Yet, it’s proviso 2 to section 92 provides an exception. If there is any separate verbal agreement to a matter relating to the case and the document which is used as evidence is silent to such matter and terms are not consistent then the verbal agreement may be accepted as evidence.
Proviso 3 additionally provides an exception. Here, if there is a verbal agreement before any such obligation of the contract before imposing it upon the party, then also verbal agreements may become evidence in court
Now, the matter of obligation to perform the terms might go to court. The court will look into the “entirety of circumstances” instantaneous the contracts.
The burden of proof lies on the party who is appealing the right to prove the presence of a verbal agreement. A verbal agreement can be verified by a recording or a witness.
This could be the evidence which an individual may perhaps deliver to prove his right. Verbal agreements are permissible, but also awfully tricky to prove. It is based on quite a few pieces of evidence, if they all point in one precise route.