Oral Agreement

An oral agreement is a contract that is not in writing. It is typically just a working agreement between two parties on the terms that they want to eventually agree to in the contract. Because most states have a statute of frauds that requires real estate agreements to be in writing, oral agreements are typically not enforceable or binding. Though the parties might believe that they have agreed to a contract, one side or the other can usually break the deal without any ramifications. Oral agreements are typically made in the days before a contract is put on paper. The oral agreement might include things that eventually make it into the written contract, though this is not a requirement. These oral agreements do provide the two parties with a chance to negotiate different contract elements that are important to both sides. During the process of forming an oral contract, the two parties will determine whether they can actually come together on a deal that is acceptable to each.