A common question that many lawyers hear concerns verbal agreements. Is a verbal contract legally binding as far as debts are concerned? The answer is yes, but there may be some obstacles in the way that must be overcome. The court must believe that a verbal contract was entered into by both parties, and without a written agreement this may be difficult to prove. It is possible in some cases though, and courts will uphold this type of contract as long as it can be proven to a judge in court.
Proving that a verbal contract does exist between two parties often falls down to what each side says. In these cases the judge will have to determine which party is more credible, and whether there is sufficient proof that a verbal agreement was actually reached between the parties. The individual being sued does not have to provide any defense, they can stand moot because they do not have to prove innocence. The person bringing the lawsuit, called the plaintiff, bears the burden of proving that the defendant is guilty of the allegations. The plaintiff must also prove that the other party entered into a verbal contract but did not fulfill their end of the agreement.
There are ways to win a case that involves debts and a verbal contract. Witnesses, text messages, and any other type of documentation that shows an agreement was made is often enough to win any lawsuit. Any witnesses should appear in person rather than signing a statement for the court, so that the witness can be questioned by the judge if necessary. You should also bring any recorded phone messages, emails, and any other possible proof to either prove or dispute that a verbal contract was agreed upon by both parties.
Often debts that involve verbal contracts are loans, and lawsuits concerning these verbal contracts may involve the full loan amount or just a balance owed. If you have proof of any payments that were made on the loan then bring this proof with you to court. Often a judge will determine that a verbal contract for a loan was valid if payments have been made to repay the loan. This proof of payment may help win the case and provide a verdict in your favor.
Always be honest about all of the circumstances and agreements surrounding the verbal contract. Never try to claim more or less than what has actually been paid, and never lie about the basic tenets of the agreement. Anyone who is found to be lying in court will automatically be seen as dishonest, making everything said by the individual suspect in the eyes of the court. Honesty is the best policy whenever you must appear in court, and this simple tip is very valuable.
Any time that a verbal contract is entered into it is always a good idea to put something in writing. This step can save you a lot of hassle and even money in the future. It is possible to enforce a verbal contract if you can prove to the court that one exists, but proving this fact can be difficult based on the fact that the agreement is verbal and not written.
If you are filing for bankruptcy protection make sure that you list all of your debtors, even if you only have a verbal contract for the debts owed. This is true whether you owe the debt or you are the creditor in the case.