Are verbal agreements enforceable?

You may have heard that former Socceroos coach Ange Postecoglou was appointed manager of prominent English soccer club Tottenham Hotspur. But what you might not know is that, before the two parties signed a contract, they reached a verbal agreement.

That begs the question: are verbal agreements enforceable in Australia?

The answer is generally yes, but there are two exceptions to the rule.

First, some written contracts aren’t valid if they don’t meet certain conditions, such as a clear offer being made and that offer being definitively accepted. If any contract failed that test – whether written or verbal – it wouldn’t be enforceable.

Second, some contracts are enforceable only if they’re in writing. They include property transactions, vehicle transactions and agreements that involve an act being performed more than one year in the future.

Verbal agreements are risky

But just because a verbal agreement may be enforceable, doesn’t mean it’s a good idea.

There’s an old joke that verbal contracts aren’t worth the paper they’re written on. That’s because they’re hard to prove in court. If you reach a verbal agreement but there are no witnesses, it becomes your word against the other party’s. And even if you do have a witness, the court may reject their testimony if they’re seen as being non-credible.

That’s why we strongly advise you to put all agreements in writing.

Technically, you don’t need a lawyer’s help. But if you draw up your own contract, you run the serious risk of omitting a key clause or writing a clause in such a way that it could be misinterpreted to your disadvantage. An experienced lawyer, like Sutton Laurence King, can help you create a clear, strong contract that protects your interests.

Blaine Hattie is a business lawyer and principal at Sutton Laurence King Lawyers.

For expert advice on commercial law in Victoria contact Sutton Laurence King Lawyers today on 03 9070 9810 or  for help.